Bright China outlook drags metals found in steel higher

1 September 2017

Steel-related contracts again led the base metals complex higher on Friday, gaining momentum from a positive outlook for Chinese industrial activity.

China’s manufacturing activity expanded at the fastest pace in six months in August, buoyed by a surge in export orders and higher prices, according to the private Caixin manufacturing purchasing managers index.

The official Purchasing Managers’ Index (PMI) released on Thursday rose to 51.7 in August from 51.4 the previous month.

* NICKEL LEADS: Shanghai Futures Exchange nickel was among the biggest gainers, with the most active contract ending 1.7 percent higher at 94,650 yuan ($14,395) a tonne. London Metal Exchange three-month nickel was lifted 0.8 percent to $11,895 a tonne. The contract is trading at its highest since November 2016, according to Thomson Reuters data.

Nickel is chiefly used in making stainless steel.

“The PMIs were all positive and that’s reassuring people that China’s steel industry is on track,” said a commodities trader in Perth. “That’s pushing the steel-related metals higher.”

The official Purchasing Managers’ Index (PMI) released on Thursday rose to 51.7 in August from 51.4 the previous month.

Chinese rebar steel futures rose more than 5 percent on Friday - its biggest one-day gain since April 2016. It also hitting its highest since early 2013 during the session.

*CHINA SMOG: China plans to conduct 15 rounds of inspections during its new campaign to curb smog during winter, the environment ministry said on Friday, as the country strives to meet politically important air quality targets.

* ZINC UP: The most traded Shanghai Futures Exchange zinc contract closed 1.4 percent higher, while LME zinc was a more modest 0.4 percent higher at $3,158.50 a tonne. Zinc is used in galvanizing steel against rust.

* SHFE ALUMINIUM: ShFE aluminium, used widely in construction and aerospace, also found support, rising 1.8 percent. LME aluminium was trading 1 percent firmer at $2,138.50 a tonne, the highest since early 2013.

* LME COPPER: LME copper was up 0.4 percent to $6,818 a tonne The contract touched a peak of $6,872 on Thursday, the highest since September 2014.

* SHFE COPPER: The most-traded copper contract on the Shanghai Futures Exchange ended up 0.3 percent.

* SPECULATION: A speculative frenzy triggered by a falling dollar, tighter supplies and healthy demand in top consumer China have in recent weeks propelled prices of industrial metals to multi-year highs.

* INDONESIA CHEERS: Indonesia’s government left no doubts as to who it believes got the better deal in its landmark agreement with Freeport McMoRan Inc on the future of the Grasberg copper mine.

* MINE BOOST: Canadian miner First Quantum Minerals Ltd said on Thursday it would boost its stake in unit Minera Panama SA to 90 percent in a deal valued at $635 million to increase its copper mining operations.


Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin