SMM Evening Comments (Aug 31): Shanghai nonferrous metals ended mixed as China factory data boosted recovery hopes

SHANGHAI, Aug 31 (SMM) — SHFE nonferrous metals closed mixed on Monday August 31.

China announced Monday that manufacturing activity expanded in August, with the official manufacturing Purchasing Managers’ Index for that month coming in at 51.0, according to the National Bureau of Statistics.

Nickel, the best performer, rose 1.52%, tin advanced 0.69% and copper climbed 0.5%, while zinc edged down 0.03%, aluminium weakened 0.07% and lead shed 0.45%.

SMM data showed that social inventories of refined zinc ingots across Shanghai, Tianjin, Guangdong, Jiangsu, Zhejiang, Shandong and Hebei increased 2,100 mt from August 28 to 179,300 mt as of August 31. The stocks were up 4,600 mt from last Monday August 24.

The ferrous complex rose across the board. Hot-rolled coil and rebar rose 1.67%, iron ore advanced 2.61%.

Copper: The most-traded SHFE 2010 copper contract rose to an intraday high of 52,170 yuan/mt after the opening bell, and closed 0.5% higher at 51,980 yuan/mt today. China announced Monday that manufacturing activity expanded in August. The official manufacturing Purchasing Managers’ Index (PMI) for that month came in at 51.0, according to the National Bureau of Statistics. The contract will test support from 52,000 yuan/mt tonight.

Aluminium: The most-liquid SHFE 2010 aluminium contract surged to an intraday high of 14,690 yuan/mt and ended 0.07% lower at 14,540 yuan/mt today. Open interest fell 2,275 lots to 128,843 lots. The open interest and the flow of funds will come under scrutiny.

Zinc: The most-active SHFE 2010 zinc contract closed down 0.03% at 19,905 yuan/mt today. Open interest fell 6,984 lots to 106,000 lots. Zinc social inventories rose 2,100 mt over weekend. The contract is expected to remain above five-day and 10-day moving average tonight.

Nickel: The most-traded SHFE 2011 nickel contract finished the day 1.52% higher at 121,240 yuan/mt. Open interest fell 4,072 lots to 157,000 lots.

Lead: The most-traded SHFE 2010 lead contract slid to an intraday low of 15,570 yuan/mt, and finished the day 0.45% lower at 15,605 yuan/mt. Open interest fell 6,659 lots to 29,339 lots. Whether the contract could remain above 15,600 yuan/mt will be monitored tonight.

Tin: The most-liquid SHFE 2011 tin contract rose to an intraday high of 145,980 yuan/mt, before giving some gains to end 0.88% higher at 145,250 yuan/mt today. Open interest fell 259 lots to 22,331 lots. Pressure above is expected to around 146,000 yuan/mt.