SMM Evening Comments (Jul 2): Shanghai nonferrous metals fell for the most part, aluminium gained 1.34%

SHANGHAI, Jul 2 (SMM) – Shanghai nonferrous metals, except for aluminium, fell across the board amid high PMI and US nonfarm payrolls data.

Nickel led the loss by shedding 1.14%, copper fell 0.67%, lead dropped 0.76, zinc decreased 0.65, and tin slid 0.48, while aluminium increased 1.34%.

The ferrous complex basically fell. Iron ore rose 0.77%, rebar fell 0.62%, and HRC dropped 0.61%.

Copper: The most traded SHFE 2108 copper contract dropped 0.67% to end at 68,260 yuan/mt today, with open interest up 275 lots to 121,200 lots.

US Fed suggested to start tightening the monetary policy late this year, and stated that the one-year reduction would be reasonable. The initial jobless claims fell to a new low yesterday since the outbreak of the pandemic. The manufacturing industry PMI for June was slightly lower than expected, but stayed in rapid expansion. Caixin manufacturing PMI for June declined slightly. OPEC+ proposal of lifting the oil output by 400,000 barrels per month from August to December was objected by UAE, and the meeting will be held again on Friday. The US nonfarm payrolls will be the focus in the overnight trading. Whether the market sentiment after the released data can guide the copper prices is worth attention.

Aluminium: The most traded SHFE 2108 aluminium contract gained 1.34% to end at 18,880 yuan/mt today, with open interest down 749 lots to 206,000 lots. Bulls entered the market and drove up the prices today. Inventories increased 2,000 mt yesterday, and the transportation was still impeded. Whether the inventories will keep rising in the off-peak season is to be seem. SHFE aluminium is expected to further reserve this week’s loss in the overnight trading.

Lead: The most traded SHFE 2108 lead contract closed 0.76% lower at 15,730 yuan/mt today, with open interest down 3,933 lots to 60,070 lots.

Spot trade was sluggish amid high lead prices this week, and holders were highly willing to deliver goods to social warehouses, resulting in the marked expectation of the increase in lead ingot social inventories. Overseas high prices may bring export chances. The market is in a game between the peak season of consumption and the high inventories, and lead prices may stand high to enter the peak season. The support line of the 5-day moving average is worth attention in the overnight trading.

Zinc: The most active SHFE 2108 zinc contract fell 0.65% to close at 22,020 yuan/mt today, with open interest down 4,493 lots to 93,381 lots.

Nickel: The most liquid SHFE 2108 nickel contract finished the day 1.14% lower at 134,000 yuan/mt today, with open interest down 11,043 lots to 122,792 lots.

Tin: The most traded SHFE 2108 tin contract ended 0.11% lower at 211,550 yuan/mt today, with open interest down 2,670 lots to 37,189 lots. SHFE lead maintained the high premiums. Smelters were less willing to ship goods at low prices, while downstream purchase enthusiasm recovered, and market trade picked up.