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SMM Evening Comments (Aug 3): Shanghai nonferrous metals declined for the most part while ferrous metals surged across the board
Aug 3,2020 18:43CST
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Source:SMM
SHFE nonferrous metals mostly declined on Monday August 3, with lead, the best performer, surging 1.95%, as consumption of lead-acid batteries improved and social inventories of lead ingots shrank.

SHANGHAI, Aug 3 (SMM) — SHFE nonferrous metals mostly declined on Monday August 3, with lead, the best performer, surging 1.95%, as consumption of lead-acid batteries improved and social inventories of lead ingots shrank.

 

Lead, the best performer, surged 1.95% and tin added 0.42%, while copper declined 1.14%, aluminium weakened 0.54% and nickel fell 1.22%.

 

The ferrous complex jumped across the board. Iron ore surged 4.24%, rebar advanced 2.08% and hot-rolled coil increased 2.36%.

 

SMM data showed that social inventories of refined zinc ingots across Shanghai, Tianjin, Guangdong, Jiangsu, Zhejiang, Shandong and Hebei expanded 6,700 mt from July 31 to 201,900 mt as of August 3.

 

The Caixin/Markit manufacturing Purchasing Managers’ Index (PMI) came in at 52.8 for July, marking its third consecutive month of expansion. It showed that policy stimulus is helping China, the world’s second largest economy, in its recovery from the Covid-19 pandemic.

 

Copper: The most-active SHFE 2009 copper contract plunged more than 700 yuan/mt to an intraday low of 50,210 yuan/mt after opening when the US dollar index jumped, before reversing some losses to close 1.14% lower at 51,050 yuan/mt. Continued tensions between the US and China and geopolitical risks boosted risk aversion sentiment, but robust Caixin/Markit manufacturing PMI strengthened investors’ confidence in the recovery of Chinese economy. Whether the September contract could remain above 51,000 yuan/mt will be monitored tonight.

 

Aluminium: The most-liquid SHFE 2009 aluminium contract fell rapidly to a session low of 14,475 yuan/mt after opening, before regaining the ground and rebounding to around 14,600 yuan/mt. The contract finished the day 0.54% lower at 14,600 yuan/mt. Domestic aluminium ingot inventories dipped from last Thursday July 30, and stocks under warrants also fell below 100,000 mt. Changes in open interest will come under scrutiny tonight.  

 

Zinc: The most-traded SHFE 2009 zinc contract ended flat at 18,790 yuan/mt today in choppy trading. Arrivals of domestic products and inflow of imported cargoes bolstered zinc inventories, and rising treatment charges will bolster output. The September zinc contract is likely to fluctuate rangebound tonight.

 

Nickel: The most-liquid SHFE 2010 nickel contract ended 1.22% lower at 109,040 yuan/mt today, after recouping earlier losses and rising to a session high of 109,690 yuan/mt. Whether the contract could stay above 109,000 yuan/mt will come under scrutiny tonight.

 

Lead: The most-traded SHFE 2008 lead contract surged to an intraday high of 16,010 yuan/mt, before giving some gains to end 1.95% higher at 15,920 yuan/mt today. The contract rose for seven consecutive days, and an optimistic outlook on consumption may further boost the contract. Whether support from longs could keep the contract above 16,000 yuan/mt will be watched tonight.

 

Tin: The most-active SHFE 2010 tin contract closed 0.42% higher at 146,600 yuan/mt, after climbing to an intraday high of 147,500 yuan/mt. Pressure above is seen from 147,500 yuan/mt, and support below is seen from 145,000 yuan/mt tonight.

Evening comments
Copper
Aluminium
Zinc
Nickel
Lead
Tin

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