SMM Evening Comments (May 10): Shanghai nonferrous metals rose broadly, copper soared 4.81%

SHANGHAI, May 10 (SMM) – SHFE nonferrous metals rose for the most part on Monday May 10. Copper soared 4.81%, aluminium surged 3.68%, zinc jumped 2.79% and lead gained 0.45%, while nickel edged down 0.06% and tin fell 1.22%.  

Social inventories of lead ingots across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin rose 2,500 mt from last May 7 to 69,200 mt as of Monday May 10, an SMM survey showed. This was up 2,500 mt from last Monday April 26.

SMM data showed that social inventories of refined zinc ingots across Shanghai, Tianjin, Guangdong, Jiangsu, Zhejiang, Shandong and Hebei increased 5,600 mt from last Friday May 7 to 187,900 mt as of Monday May 10. The stocks were up 7,800 mt from April 30.

Copper: The most-traded SHFE 2106 copper contract soared 4.81% to finish the day at 77,720 yuan/mt, with open interest losing 8,337 lots to 152,000 lots. US non-farm unemployment rose to 6.1% in April, and the US dollar index slumped to its lowest since February. High copper prices depressed consumption, and downstream users mostly purchased only as required. Some copper smelters halted production for maintenance after the Labour Day holiday. Copper prices is likely to remain high in the short term.

Aluminium: The most-active SHFE 2106 aluminium contract surged 3.68% to close the day at 20,420 yuan/mt, with open interest decreasing 18,240 lots to 253,000 lots.

Zinc: The most-liquid SHFE 2106 zinc contract jumped 2.79% to end the day at 22,805 yuan/mt after hitting a new high since the beginning of this year of 23,065 yuan/mt earlier in the session, with open interest losing 755 lots to 90,573 lots. Imports of zinc concentrate and zinc ingot stood at 360,000 mt and 46,100 mt respectively in March, exceeding expectation, and domestic supply is likely to be in tight balance in April-May. Domestic zinc mines restored production, while more smelters will conduct maintenance in May, which weighed on demand for zinc concentrate. The June contract is expected to move between 22,000-23,000 yuan/mt tonight.

Nickel: The most-traded SHFE 2106 nickel contract edged down 0.06% to finish the day at 133,150 yuan/mt, with open interest decreasing 9,365 lots to 119,000 lots.

Lead: The most-active SHFE 2106 lead contract closed the day 0.45% higher at 15,700 yuan/mt, with open interest losing 3,204 lots to 52,136 lots. Strong LME lead and lower treatment charges for lead concentrate supported SHFE lead. Whether the contract could steady above the 15,700 mark tonight will be monitored.

Tin: The most-liquid SHFE 2107 tin contract ended the day 1.22% weaker at 195,710 yuan/mt, with open interest adding 2,335 lots to 32,183 lots.