Chinese firms have been snapping up US soybeans this week.
The companies, which received a fresh 1.8 million-tonne quota from Beijing to import US beans free of retaliatory tariffs, have been seeking soy every day so far.
That is likely because they want to rush through orders in case trade talks between Washington and Beijing fail and imports are halted, said Darin Friedrichs, a senior analyst at INTL FCStone’s Asia commodities division.
“The Chinese soybean purchases are a necessity and may be a sign that the crushers want to get these grades in quickly because things could change on talks,” Friedrichs said.
The wariness of commodity traders is perhaps understandable given the whipsawing in relations between US President Donald Trump and Chinese President Xi Jinping (習近平) over the past year.
Chinese firms were issued tariff waivers in July as Beijing offered Washington an olive branch, only to see shipments stopped about a month later after talks fell apart.
Top negotiators from the two countries are expected to meet in Washington on Thursday.
November soybean futures on Friday rose 0.3 percent to US$9.16 a bushel in Chicago. Prices gained 3.7 percent this week.
The purchases might also be because it makes financial sense. Margins on crushing US soybeans in China are higher than those of rival Brazil thanks to the lower prices of US soy when retaliatory tariffs are removed.
Chinese state-owned and private firms bought at least six cargoes of US soy, equivalent to about 363,000 tons, said people familiar with the purchases, asking not to be identified because the information is private.
That is on top of 12 to 15 cargoes purchased earlier this week.
The nickel market is being roiled by Indonesia’s impending ban on ore exports, with traders rushing to withdraw as much metal as possible.
Inventories tracked by the London Metal Exchange (LME) posted a record decline for a second straight day on Friday, adding fuel to a rally that has put prices on course for their biggest annual gain since 2006.
Stockpiles of the metal — a key ingredient in alloys like stainless steel — are at the lowest level since 2012.
It is the latest sign that supply shockwaves are reverberating through the global market ahead of Indonesia’s ban, due to start in January.
Prices climbed 0.9 percent to US$17,790 a ton in London, adding to a 66 percent gain this year. For the week, inventories have fallen by about 22,000 tonnes, far surpassing a previous record set in 2015.
The decline in inventories has come amid intense bidding for short-dated contracts on the LME that has caused nickel’s forward curve to invert, with spot contracts trading near the biggest premium to three-month futures since 2007.
That condition, known as a backwardation, is seen in the industry as a hallmark feature of a supply shortage.
Most other industrial metals have dropped this year because of mounting concerns over demand as factory activity across Asia, Europe and the US enters a sharp contraction.
Other metals were mixed.
Spot gold settled at US$1,504 an ounce, up 0.7 percent for the week.
Copper declined 0.3 percent to settle at US$5,643 a ton in London, after falling as much as 1 percent, as investors digested a mixed US jobs report for last month.
Zinc and lead traded higher, while aluminum and tin were little changed.
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