SMM Evening Comments (Oct 15): Shanghai nonferrous metals closed mostly higher

SHANGHAI, Oct 15 (SMM) – SHFE nonferrous metals, except for copper and lead, ended higher on Thursday October 15.

Nickel rose 1.02% to lead the gains, aluminium added 0.24%, zinc advanced 0.36% and tin inched up 0.03%, while copper and lead underperformed with 0.1% and 0.27% losses.

SMM data showed that aluminium billet stocks across the five major consumption areas — Foshan, Wuxi, Huzhou, Changzhou and Nanchang — in China dipped 3,200 mt from last Friday to 102,500 mt as of Thursday October 15. Inventories in Foshan and Changzhou rose slightly week on week, while stocks in Wuxi, Huzhou and Nanchang declined.

Social inventories of primary aluminium ingots across eight consumption areas in China, including SHFE warrants, increased 4,000 mt from Ocotber 9 to 719,000 mt as of Thursday October 15.

Copper: The most-traded SHFE 2011 copper contract finished the day 0.1% lower at 51,260 yuan/mt, with open interest falling 1,179 lots to 108,000 lots. China’s new yuan loans and social financing data topped expectations as its economy has been recovering from the COVID-19 pandemic. The producer price index (PPI) for September inched up 0.1% on the month, but fell 2.1% on the year. Central bank officials expected the third-quarter GDP to expand further. Whether the US initial jobless claims and EIA inventory data set to release tonight could provide sufficient rising momentum for SHFE copper will be monitored.    

Aluminium: The most-traded SHFE 2011 aluminium contract ended the day 0.24% firmer at 14,680 yuan/mt, with open interest rising 944 lots to 127,000 lots. The total amount of warrants increased 1,320 mt to 126,691 mt, and Jiangsu province mainly accounted for the increase.   

Zinc: The most-liquid SHFE 2011 zinc contract rose 0.36% to end the day at 19,265 yuan/mt. Spot trades were tepid, but uncertainties over zinc concentrate supply in Q4 will limit declines in zinc futures prices. SHFE zinc is likely to weaken slightly in the near term.  

Nickel: The most-traded SHFE 2012 nickel contract rose 1.02% to settle at 117,860 yuan/mt today, with open interest rising 6,791 lots to 117,305 lots.

Lead: The most-active SHFE 2011 lead contract shed 0.27% to end at 14,550 yuan/mt today. Production costs of secondary lead fell as battery scrap prices declined. This, coupled with a stronger US dollar, weighed on lead prices. The November lead contract is likely to test the support from 14,500 yuan/mt today.

Tin: The most-active SHFE 2012 tin contract inched up 0.03% to close at 146,150 yuan/mt in choppy trading today. It is expected to move between 145,000-148,000 yuan/mt tonight.