SMM Evening Comments (Aug 24): Shanghai nonferrous metals declined for the most part, nickel advanced 1.34%

SHANGHAI, Aug 24 (SMM) – SHFE nonferrous metals broadly fell on Monday August 24 amid the low season of downstream consumption.

Shanghai nonferrous metals, except for nickel, traded lower on Monday August 24. Tin dropped 1.38% to lead the losses, lead weakened 0.59%, zinc shed 1.05%, copper declined 0.83%, and aluminium fell 0.44%, while nickel advanced 1.34%.

SMM data showed that social inventories of refined zinc ingots across Shanghai, Tianjin, Guangdong, Jiangsu, Zhejiang, Shandong and Hebei fell 1,000 from last Friday August 21 to 174,700 mt as of Monday August 24. The stocks were down 2,500 mt from last Monday August 17. 

The ferrous complex closed mixed. Hot-rolled coil fell 0.61%, iron ore shed 1.83%, while rebar added 0.03%.

Copper: The most-traded SHFE 2009 copper contract closed 0.83% weaker at 51,540 yuan/mt today. The People’s Bank of China (PBOC) launched a total of 160 billion yuan of rollover and realized a net investment of 110 billion yuan on Monday. Market liquidity continues to be supplemented in the near term, supporting the steady operation of copper prices. Whether the contract could maintain its upward trend will come under scrutiny tonight.

Aluminium: The most-liquid SHFE 2009 aluminium contract climbed to an intraday high of 14,775 yuan/mt this afternoon and finished the day 0.44% lower at 14,755 yuan/mt. Open interest fell 7,855 lots to 105,000 lots. The shift of open interests and the flow of arbitrage funds this month will be monitored.

Zinc: The most-active SHFE 2009 zinc contract generated a V-shaped movement on Monday, closing down 1.05% on the day at 19,845 yuan/mt. Open interest fell 1,381 lots to 99,547 lots. The contract is expected to fluctuate on high platform between five-day moving average and ten-day moving average tonight.

Nickel: The most-traded SHFE 2010 nickel contract finished the day 1.34% higher at 117,160 yuan/mt as the US dollar index fell. Open interest increased 2,957 lots to 106,292 lots. Whether the contract could move below 118,500 yuan/mt will come under scrutiny tonight.

Lead: The most-active SHFE 2009 lead contract climbed to an intraday high of 16,055 yuan/mt in morning trading, and finished the day 0.59% lower at 15,930 yuan/mt. Open interest increased 2,519 lots to 26,057 lots. The contract will test support from the 20-day moving average tonight.

Tin: The most-traded 2010 tin contract fell to an intraday low of 140,560 yuan/mt, and closed 1.38% lower at 141,190 yuan/mt. The resource tax of tin mines were raised last Friday. The miners actively sold the inventories before the implementation of the policy on September 1, increasing the market supply in the near term and curbing SHFE tin prices. Whether the contract could move below 60-day moving average will come under scrutiny tonight.