SHANGHAI, Aug. 4 (SMM) -- SHFE base metal prices were mixed yesterday after opening lower amid generally plummeting stock markets, with SHFE aluminum prices closing with strong gains after climbing while SHFE copper, lead, and zinc prices continuing to fluctuate at low levels. Trading volumes of major metals declined significantly.
The China Federation of Logistics and Purchasing (CFLP) announced on August 3rd that the Purchasing Managers Index (PMI) for China's non-manufacturing sector was 59.6% during July, up 2.6% on a monthly basis. The index has remained above 50% for five consecutive months, but the figure also has declined for two consecutive months, indicating the non-manufacturing activities slowed down.
With regard to commodity markets, crude oil futures closed down to a multi-day low on August 3rd on the New York Mercantile Exchange, since investors were concerned about the slowing of US economic growth and US crude oil inventories increased last week. The most active light crude oil contracts dropped USD 1.86 to settle at USD 91.93/bbl, down 1.98%. Brent oil for September settlement declined USD 3.23, or 2.77%, to end the session at USD 113.23/bbl. Gold futures closed up on August 3rd, with gold futures for December delivery closing at USD 1,663.70/oz on the COMEX in New York, setting a record high.
LME base metal prices closed with losses across the board on August 3rd. Downbeat US economic data weighed down on base metal prices, and market ignored impact of supply shortage caused by labor strike at a copper mine in Chile. LME copper futures contract for delivery in three months closed at USD 9,549/mt, the lowest since July 6th, down by USD 104/mt, or down by 1.08% from a day earlier. LME aluminum futures finished at USD 2,531/mt, down by USD 42.75/mt from a day earlier. LME lead futures closed USD 33/mt lower at USD 2,535/mt. LME zinc futures closed USD 40/mt lower at USD 2,398/mt. LME nickel futures finished at USD 23,920/mt, down by USD 780/mt, or down by 3.16% from a day earlier, and LME tin futures finished at USD 26,499/mt, down by USD 801/mt from a day earlier.
Uncertainties exacerbated in August. High inflationary pressure, extension of tight monetary policy and downbeat US economic data all weighed on market, and time is still needed before market absorbs negative impact from these uncertainties. SMM expects SHFE base metal prices will largely experience corrections in the short term, with market waiting for emergence of clearer fundamental and economic trends.