SMM Morning Comments (Jul 17): Shanghai base metals mixed after Thursday’s plunge

Published: Jul 17, 2020 10:00

Save

Nonferrous metals on the SHFE traded on a mixed note on Friday morning, following Thursday’s plunge amid sharp losses in mainland Chinese stocks. In overnight trading, lead tumbled 1.2%, aluminium declined 0.4% and nickel sank 0.3%, while copper climbed 0.5%, tin rose 0.6% and zinc moved 0.9% higher.

SHANGHAI, Jul 17 (SMM) – Nonferrous metals on the SHFE traded on a mixed note on Friday morning, following Thursday’s plunge amid sharp losses in mainland Chinese stocks.

In overnight trading, lead tumbled 1.2%, aluminium declined 0.4% and nickel sank 0.3%, while copper climbed 0.5%, tin rose 0.6% and zinc moved 0.9% higher.

On the LME, nonferrous metals rose across the board in European and North American trading hours on Thursday, recovering from losses made earlier in the session, and closed mixed. Nickel dropped 1% on the day, lead fell 0.8% and aluminium shed 0.6%, while copper inched up 0.2%, tin advanced 0.3% and zinc rose 0.6%.

The US dollar index, which tracks the greenback against a basket of its peers, was little changed in the morning of Asian trading hours on Friday, after a rebound in the previous session, while oil prices, edged lower as OPEC and other producers including Russia agreed to ease record supply curbs from August.

Copper: Three-month LME copper reversed an earlier slip to close 0.24% firmer at $6,410/mt on Thursday, after two consecutive days of losses. It is expected to trade between $6,370-6,430/mt today.

The SHFE August contract rose to a session-high of 51,670 yuan/mt before ending up 0.45% at 51,510 yuan/mt in overnight trading. The September contract has become the most actively traded copper contract on the SHFE and is likely to trade between 51,250-51,550 yuan/mt today. Spot premiums are seen higher to 40-50 yuan/mt on expectations of dip-purchases.

Positive fundamentals encouraged longs to return to the copper market after some losses, but rising coronavirus cases globally, a rebound in the US dollar index and increased downward pressure on oil prices after OPEC+ agreed to ease output curbs weighed on copper prices.

Aluminium: Three-month LME aluminium fell for a third straight day on Thursday, shedding 0.6% to $1,668.5/mt. It is likely to move between $1,650-1,690/mt today.

The most-liquid SHFE August contract rose slightly from lows in more than a week in overnight trading, but remained in negative territory and closed down 0.35% at 14,145 yuan/mt. Low social inventories in China will continue to offer support, while eased spot tightness after the expiry of the SHFE July contract and profit-taking in the broad markets weigh. The SHFE August contract is expected to move between 14,000-14,400 yuan/mt today.

Zinc: The rally in European and North American trading hours lifted tree-month LME zinc into positive territory, which gained 0.59% to finish Thursday’s trading session at $2,214/mt. Data showed that zinc stocks at LME warehouses continued to trend lower on Thursday, falling 450 mt, or 0.37% to 122,525 mt. The contract is expected to move between $2,170-2,220/mt today.

The most-active SHFE September contract followed its LME counterpart higher in overnight trading, rising to a session-high of 17,970 yuan/mt before easing to close 0.85% higher at 17,865 yuan/mt. It is supported by the 10-day moving average, while faces resistance at the upper Bollinger band. The contract is expected to trade at 17,500-18,000 yuan/mt today. Spot premiums for 0# domestic Shuangyan are seen at 90-110 yuan/mt over the August contract.

Nickel: Three-month LME lead fell to a session-low of $13,210/mt before recovering some ground to close 1% lower at $13,400/mt on Thursday, registering a three-day losing streak.

The most-active SHFE October contract weakened 0.32% to end at 106,920 yuan/mt in overnight trading, after briefly crossing into positive territory to a session-high of 107,320 yuan/mt earlier in the session. It now faces pressure from the five- and 10-day moving averages.

Lead: Three-month LME lead weakened 0.76% to $1,839.5/mt on Thursday, after touching a session-low of $1,824/mt earlier in the session. The uptrend in LME lead seemingly has yet to come to an end.

The most-traded SHFE August contract hovered around one-week lows in overnight trading, shedding 1.19% to 14,910 yuan/mt in overnight trading. Whether it could remain above the 20-day moving average will come under scrutiny.

Tin: Three-month LME tin strengthened 0.26% to $17,340/mt on Thursday, after slipping to a session-low of $17,055/mt earlier in the session. It now resides around the five-day moving average, and still faces pressure at 17,450.

The most-active SHFE September contract hit a session-high of 142,150 yuan/mt before erasing some gains to close 0.58% firmer at 141,460 yuan/mt in overnight trading. It now stays below the five- and 10-day moving averages, and faces pressure at 141,500.

Morning comments Copper Aluminium Zinc Lead Nickel Tin

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or for more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

2 hours ago

Copper Prices Reach Two-Month High as U.S. Inflows Surge Ahead of Tariff Decision

Copper prices climbed to around US$14,000 per tonne on the London Metal Exchange (LME), reaching their highest level in two months as traders continued to monitor record inflows of copper into the United States ahead of an anticipated decision on refined copper import tariffs. According to foreign media reports, more than 200,000 tonnes of copper arrived at U.S. ports during July, representing the largest monthly inflow recorded by IHS Markit since it began tracking the data in 2014. The surge has significantly increased inventories at U.S. warehouses and ports while reducing the volume of metal available to consumers in other regions. The inflows have continued despite uncertainty over potential U.S. tariffs on refined copper imports. Although the U.S. Commerce Department was expected to submit its recommendations by the end of June, no formal decision has yet been announced. The sustained premium of U.S. copper prices over LME prices has continued to support profitable arbitrage opportunities, encouraging traders to redirect material into the U.S. market. Market Impact: The concentration of copper inventories in the United States is tightening physical availability elsewhere, reinforcing an already constrained global market. With copper prices remaining near historic highs and demand supported by electrification, power infrastructure and advanced manufacturing, any tariff decision that further alters global trade flows could intensify regional supply imbalances and provide additional upside for international copper prices.

2 hours ago

9 hours ago

【SMM Flash】Middle East August Sulfur Contract Prices Released

KPC has set the August Kuwait Sulphur Price (KSP) at $865/mt FOB, down by $85/mt from the July KSP of $950/mt; QatarEnergy has kept its August Qatar Sulphur Price (QSP) unchanged at $890/mt FOB from July; ADNOC has kept its August official selling price (OSP) for the Indian subcontinent unchanged at $1,000/mt FOB Ruwais from July.

9 hours ago

10 hours ago

Khoemacau Copper Mine Boosts Q2 2026 Output, Expansion On Track

Botswana's Khoemacau copper mine increased copper production in the second quarter of 2026 as improved ore grades offset lower mining volumes, while construction of its major expansion project continued to advance. According to MMG Limited's second-quarter production report, Khoemacau produced 11,423 tonnes of copper in concentrate during the three months ended 30 June, representing a 7% increase from the previous quarter and remaining broadly in line with production achieved in the corresponding period of 2025. Although ore milled declined year-on-year, the operation benefited from improved copper grades of 1.62%, up from 1.59% a year earlier, as mining progressed into higher-grade sections of the Zone 5 orebody. Metallurgical recovery remained stable at 88.2%. MMG said lower ore mined volumes reflected earlier development delays and reduced equipment availability. However, the company expects operational performance to strengthen during the second half of 2026 as new mining equipment is deployed, refurbished fleet units are commissioned, and access to higher-grade mining areas continues. The company maintained its 2026 copper production guidance of 48,000-53,000 tonnes while lowering C1 cash cost guidance to US$1.70-US$2.00/lb, supported by stronger silver prices. Construction of Khoemacau's expansion project also progressed during the quarter. The project is designed to increase annual copper production to 130,000 tonnes of copper in concentrate and more than 4 million ounces of silver, with first concentrate expected in the first half of 2028. Continued progress at Khoemacau reinforces Botswana's position as an emerging copper producer at a time of tightening global supply. The expansion is expected to add meaningful new copper capacity over the medium term, supporting long-term supply growth as demand from electrification, renewable energy and electric vehicle manufacturing continues to accelerate.

10 hours ago