SHFE Base Metals Warrants (2017-8-25)

Due to the conflict in the Middle East, shipping through the Strait of Hormuz has been disrupted, raising the risk of tighter global sulphur supplies. Indonesia relies on the Middle East for around 75% of its sulphur imports, and sulphur is a key raw material for producing sulphuric acid, which is essential for leaching metals in nickel and copper processing. Analysts note that sulphur inventories at Indonesia’s HPAL nickel plants typically cover only one to two months of consumption. If transport disruptions persist, some plants may be forced to cut production as early as next month. Overall, if shipping disruptions in the Middle East continue for more than a few weeks, production and demand for related metals may need to slow.

[SMM Shanghai Spot Copper] Intraday SHFE copper futures warrants increased by 11,856 mt, bringing the total to 315,488 mt. Of this, the Shanghai area increased by 8,871 mt, Guangdong decreased by 125 mt, and Jiangsu decreased by 3,110 mt.