Shanghai Futures Exchange continued with positive pushes, and copper price went up despite the short pull down at opening time.
Possible supply restriction gives backup to prices. Also the news about China’s central bank. They will insert some amounts of capital into the open market. These news also renewed confidence and removed fear of the ”market ground”.
Firstly, price of the greatly active SHFE July copper contract rose 130 yuan ($18.82) to 44,920 yuan per tonne. Coming as of 03:17 BST with around 7,690 lots shifting hands. Open interest of the contract was at around 21,530 positions.
Over the last 6 days, today will be the first time that China’s central bank will inject a net 20 billion yuan. This amount of capital will go straight into the open market today.
“China’s central bank has resumed capital injections, relieving some recent monetary constraints and boosting financial liquidity. As a result, market sentiment has improved to some extent” (Fast Markets)
Supply-side disruptions are the ones giving the backup to copper prices these days..
Copper prices increase
Secondly, LME copper stocks fell a net 3,625 tonnes to 339,200 tonnes on Wednesday. It is a third successive day of decline within LME-sheds. Thirdly, SHFE copper stocks also fell. While inventories were just down from 1,281 tonnes to 72,930 tonnes on Wednesday.
Copper project in Chile, which was put on hold in March, is cancelled. The company announced these news on Monday. Polish miner KGHM’s Sierra Gorda started this project in the first place.
Following, supply of copper scrap has tightened recently after growing in the first quarter. Meanwhile the breaks at major mines earlier in 2017 are hitting availability of metal. (Based on comments of David Lilley, co-founder of Red Kite Capital Management.)
Other base metals mainly flat; zinc, lead a bit higher
Speaking about the SHFE September nickel price, it was flat at 74,700 yuan per tonne. Following, SHFE July aluminium price was also flat at 13,725 yuan per tonne.
Furthermore, the SHFE June lead price was up 85 yuan to 16,165 yuan per tonne. Finishing, September tin price wasn’t changed at 139,000 yuan per tonne.
Currencies & data
Observing the dollar index, it was recently at 99.62 on Thursday. Makes it down for 0.03% as of 03:17 BST. Prices of the Brent crude oil spot, rose 0.27% to 50.38 per barrel. The Texas light sweet crude oil spot price was up 0.15% to $47.50.
“Crude oil was buoyed by a fall in US inventories of 5.25 million barrels and front month WTi rallied towards 48.” (Sucden Financial research data)
Looking at the Indices, Shanghai Composite dipped 0.24% to 3,045.3. US import prices for April rose 0.5%. Better than a forecast of 0.2%