SMM Evening Comments (Jul 5): Shanghai nonferrous metals rose across the board, aluminium advanced 2.97%

SHANGHAI, Jul 5 (SMM) – SHFE nonferrous metals broadly closed higher across the board on Monday July 5.

Aluminium was the best performer with a rise of 2.97%. Copper rose 1.73%, lead advanced 0.57%, nickel climbed 1.64%, tin increased 1.91% and zinc went up 0.68%.

The ferrous complex rose across the board. Iron ore advanced 5.51%, rebar rose 2.09%, and hot-rolled coil climbed 1.59%.

Copper: The most-traded SHFE 2108 copper contract finished the day 1.73% higher at 69,520 yuan/mt. Open interest rose 426 lots to 121,700 lots.

The number of nonfarm payrolls in the US in June hit the biggest increase in ten months, and the unemployment rate rose slightly to 5.9%. The mixed employment data played down the Fed's hawkish expectations, and US stocks hit another record high. The US trade deficit widened to the second highest on record in May, as imports grew faster than exports. It is possible to meet the conditions of loose code reduction later this year. European Central Bank President Lagarde warned that Delta mutant strain might threaten the equilibrium of economic risks, and Central Bank Executive Committee Schnabel said that inflation should be temporarily higher than the target, the market pays more attention to the mutant virus, and the market view may remain dovish in the near term.

Sentix investor confidence index in the euro zone, and whether copper prices could continue to rise under the support of data will continue to be monitored tonight.

Aluminium: The most-liquid SHFE 2108 aluminium contract finished the day 2.97% higher at 19,255 yuan/mt. Open interest rose 31,215 lots to 237,245 lots.

Zinc: The most-active SHFE 2108 zinc contract closed up 0.68% at 22,200 yuan/mt. Open interest rose 3,543 lots to 96,924 lots. SMM data showed that social inventories of refined zinc ingots across Shanghai, Tianjin, Guangdong, Jiangsu, Zhejiang, Shandong and Hebei increased 2,900 mt from last Friday July 2 to 115,800 mt as of Monday July 5. The stocks were down 700 mt from June 28.

Nickel: The most-traded SHFE 2107 nickel contract ended the day 1.64% higher at 136,900 yuan/mt today. Open interest rose 11,652 lots to 134,444 lots.

Lead: The most-traded SHFE 2108 lead contract ended the day 0.57% higher at 15,730 yuan/mt. Open interest rose 3,267 lots to 63,337 lots. The bulk trading of lead spot market was still light, and due to high lead prices and insufficient downstream goods, the intention of handing over positions in the trade market remained high, and the stocks of domestic lead ingots continued to increase, which led to a tight storage capacity. At present, the market is still struggling with the contradiction between the arrival of the peak season of consumption and high inventories. Combined with relatively warm macro atmosphere, lead prices may continue to fluctuate at a high level in the near term. The contract will test support from five-day moving average and 15,800 yuan/mt.

Tin: The most-liquid SHFE 2108 tin contract fell to a session low of 211,650 yuan/mt and finished the day 1.91% higher at 215,670 yuan/mt today. Open interest rose 6,047 lots to 43,236 lots.