Friday, May 12th on SHFE

Amid onsets of profit-taking, and a generally bearish sentiment towards demand for the red metal, copper prices on SHFE felt back during Today’s morning trade.

Some traders say:

“Market players took profits after Thursday’s rally, and there is no further stimulus supporting the red metal.”

“The retreat of the whole base metals complex was mainly due to the bearish outlook for the market – weakened consumption and moderate macroeconomics.”

Copper prices movement

Firstly, LME copper stocks fell by 2,475 tons to 336,725 tons on Thursday.  It is the fourth running decline within LME-sheds this week. Secondly, SHFE copper prices were lifted on Thursday by reports that the People’s Bank of China is going to release funding on Friday. Which will ease market concerns of tightened Chinese credit.
“PBoC’s attempt to ease short term credit conditions boosted a wave of short-covering, however, the red metal sees limited space to move up further.”
“We still see uncertainties over whether domestic consumption will support the decline of inventories, and whether the peak consumption season will turn out to be bullish.”

“Recent supply disruptions at copper mines were not felt in metal production earlier in the year due to the large supply of copper scrap and seasonally weak demand in the first quarter of the year.” David Lilley (Reuters)
Thirdly, deleveraging in China has adversely affected “enthusiasm and optimism” in the market.  BHP Billiton has started the preparations for a potential sale of its Cerro Colorado copper mine in Chile.

Other base metals

Observing base metal prices, The SHFE September nickel price fell 150 yuan to 75,350 yuan per tonne.  Nickel prices might be under pressure on lower demand and some planned projects starting at the end of May.
Continuing with The SHFE July aluminium price which dipped 30 yuan to 13,710 yuan per tonne.
Later, SHFE June zinc price felt down 290 yuan to 22,090 yuan per tonne.
Speaking about lead, June lead price slid 300 yuan to 15,990 yuan per tonne.
The SHFE September tin price was again flat, staying at same level as yesterday.

Currencies & data

Watching today’s market, there are some noteworthy facts out. Firstly the dollar index which  was recently at 99.58, on Friday went down 0.05% as of 03:19 BST.
The Brent crude oil spot price rose 0.06% to 50.79 per barrel while the Texas light sweet crude oil spot price was up 0.38% to $47.85.
The Shanghai Composite dropped 0.24% to 3,073.23.
US PPI data was again better than the forecast, at 0.5% month-on-month in April. Against the market expectations which were at 0.2%.
Later today, we will face the new data from US. Showing CPI, retail sales. Also preliminary University of Michigan consumer sentiment and inflation expectations. Observing EU, it has monthly industrial production data due.

There is a host of US data out today including CPI, retail sales and preliminary University of Michigan consumer sentiment and forecasts for inflation, while the EU has monthly industrial production data due.