SHANGHAI, Jun. 28 (SMM) – SHFE base metals rose slightly on June 27 but are still in lack of impetus to show significant rebound.
SMM survey of China’s spot markets shows that cargo holders of copper continued to sell goods actively to generate cash, with spot copper quoted at discounts. Most investors only stayed out of the market, waiting for the shift of most active SHFE contract.
Precious metals remained weak following the slumps a day earlier, with SHFE 1312 gold contract closing at RMB 250.5/g, and SHFE 1312 silver contract settling at RMB 3,838/kg, down 0.65% and 0.83%, respectively.
The National Bureau of Statistics reported that China’s large industrial enterprises realized a 12.3% increase in profits during the first five months, with May’s profit up 15.5% YoY. Profit margin for major operations, however, fell 9.8%, expanding 5.7 percentage points from April’s decline.
Operating rates at zinc consumers fell during May due to disappointing sales. Average operating rate at zinc oxide producers posted a 4% decline in May to 60%, while die-casting zinc alloy producers saw a 6.7% fall in operating rate to 51.3%. Galvanizing sector’s operating rate dropped 2.03% MoM to 72.5%. SMM expects operating rates in these sectors to fall further in June.
Data from the China Nonferrous Metals Association show that China’s alumina output growth outstripped aluminum output increase in the first five months. SMM attributes the situation to faster commissioning of newly-added alumina projects and production cuts of aluminum producers caused by high costs and slipping aluminum prices.