SMM Evening Comments (Aug 19): Shanghai nonferrous metals closed mostly higher amid hopes of more stimulus

SHANGHAI, Aug 19 (SMM) – SHFE nonferrous metals rose for the most part on Wednesday August 19 as the monetary policies continued to be loose and one-year medium-term lending facility (MLF) loans to financial institutions and the rollover boosted macro sentiment.

Shanghai nonferrous metals, except for lead and tin, traded higher today. Copper was the best performer with a rise of 2.19%. Nickel increased 0.1%, aluminium added 1.46%, and zinc advanced 1.36%, while lead shed 0.03% and tin fell 0.13%.

Hydro has halted operation of the pipeline transporting bauxite from Hydro’ Paragominas bauxite mine to the alumina refinery Alunorte for extended maintenance, temporarily halting production at the time, and reducing production at Alunorte.

The ferrous complex closed mixed. Hot-rolled coil fell 0.15%, rebar shed 1.15%, while iron ore added 0.88%.

Copper: The most-traded SHFE 2009 copper contract climbed to an intraday high of 52,580 yuan/mt this morning, but trended lower in the afternoon, finishing the day 2.19% higher at 52,150 yuan/mt. The monetary policies continued to be loose and one-year medium-term lending facility (MLF) loans to financial institutions and the rollover boosted macro sentiment, bolstering copper prices. U.S. home builders began construction on homes at a seasonally-adjusted annual rate of 1.496 million in July, up 22.6% from the previous month and 23.4% from a year ago, the U.S. Census Bureau reported Tuesday. The pace of home building is now 7% down from the pre-coronavirus high. The data boosted market sentiment and supported copper prices. Whether the contract could maintain its upward trend will come under scrutiny tonight.

Aluminium: The most-liquid SHFE 2009 aluminium contract finished the day 1.46% higher at 14,435 yuan/mt, after hitting an intraday high of 14,660 yuan/mt. Open interest increased 733 lots to 115,000 lots. The shift of open interests and the flow of funds will be monitored in the short term.

Zinc: The most-active SHFE 2009 contract finished the day 1.36% higher at 20,175 yuan/mt as zinc ingot supply increased weakly, social inventories continued to decrease, and the short-term contradiction between supply and demand continued to push forward. Open interest increased 8,396 lots to 89,233 lots. The contract is expected to remain above 20,000 yuan/mt tonight.

Nickel: The most-traded SHFE 2010 nickel contract closed up 0.1% at 116,210 yuan/mt today. The trend of LME nickel and EIA crude oil inventories in the US this week will be monitored tonight. Whether the contract could maintain its upward trend will come under scrutiny

Lead: The most-active SHFE 2009 lead contract ended 0.03% weaker at 16,155 yuan/mt in choppy trading today. Open interest increased 1,493 lots to 18,526 lots. The contract is expected to fluctuate around the 10-day moving average tonight.

Tin: The most-traded SHFE 2010 tin contract fell to an intraday low of 141,840 yuan/mt, before recouping some gains to close 0.13% lower at 142,460 yuan/mt. The contract is expected to move above 141,000 yuan/mt in the short term.