Monday, May 23

Shanghai aluminum, nickel drop on firm dollar, demand woes


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Shanghai aluminum prices fell to a near four-week low on Monday and nickel slipped more than 4%, as a stronger dollar and demand worries due to continued COVID-19 lockdowns in China weighed on the metals.

FUNDAMENTALS

* The most-traded May aluminum contract on the Shanghai Futures Exchange was down 1.7% at 21,425 yuan ($3,364.95) a tonne, as of 0146 GMT.

* ShFE nickel dropped 4.4% to 203,990 yuan ($32,038.13) a tonne, its lowest since March 23. Three-month copper on the London Metal Exchange eased 0.3% to $10,288 a tonne.

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* The US dollar index topped 100 for the first time in nearly two years on Friday and was steady at 99.805 in morning trade, supported by the prospect of a more aggressive pace of Federal Reserve tightening.

* A stronger dollar makes greenback-denominated metals more expensive for buyers using other currencies.

* Chinese financial center Shanghai, a city of 26 million people, has been locked down under its “zero tolerance” for COVID-19. The city reported 25,173 new asymptomatic cases and 914 symptomatic cases for April 10.

* China’s factory inflation eased slightly in March but beat expectations, data showed on Monday, as the country grapples with cost pressures caused by Russia’s invasion of Ukraine and persistent supply chain bottlenecks.

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MARKETS NEWS

* Asian shares slipped ahead of a week thronging with central bank meetings and US inflation data, while the euro eked out a gain on relief the far right did not win the first round of the French presidential elections.

DATA/EVENTS (GMT)

0130 China CPI YY March

0130 China PPI YY March

0600 UK Manufacturing Output MM Feb

0600 UK GDP Estimate Feb

PRICES

Three month LME copper

Most active ShFE copper

Three month LME aluminum

Most active ShFE aluminum

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

ARBS ($1 = 6.3671 Chinese yuan) (Reporting by Brijesh Patel in Bengaluru)



financialpost.com