SMM Evening Comments (Mar 1): Shanghai nonferrous metals fell across the board on Monday

SHANGHAI, Mar 1 (SMM) – SHFE nonferrous metals all closed lower on Monday March 1. Copper fell 2.46%, aluminium declined 2.18%, zinc shed 1.52%, nickel weakened 2.44%, lead dropped 2.51% and tin plunged 3.24%.

SMM data showed that social inventories of refined zinc ingots across Shanghai, Tianjin, Guangdong, Jiangsu, Zhejiang, Shandong and Hebei increased 2,300 mt from last Friday February 26 to 264,400 mt as of Monday March 1. The stocks were up 12,000 mt from February 22.

Social inventories of lead ingots across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin expanded 1,800 mt from last Friday February 26 to 48,500 mt as of Monday March , an SMM survey showed. This was up 3,900 mt from last Monday February 22.

China’s official manufacturing Purchasing Managers’ Index (PMI) for February came in at 50.6 over the weekend, according to data released by the country’s National Bureau of Statistics.

That was lower than January’s reading of 51.3 but still above the 50 level that separates expansion from contraction.

A private survey released Monday also showed China’s manufacturing activity in February growing at a slower pace.

The Caixin/Markit manufacturing Purchasing Managers’ Index (PMI) came in at 50.9, a decline from January’s reading of 51.5.

Levels above 50 in PMI readings represent expansion while those below that signify contraction. PMI readings are sequential and show on-month expansion or contraction.

Copper: The most-traded SHFE 2104 copper contract fell 2.46% to end the day at 67,450 yuan/mt with open interest decreasing 13,111 lots to 128,000 lots.

The House of Representatives passed President Joe Biden’s $1.9 trillion stimulus package, which includes extensions to programs designed to assist millions of unemployed Americans and provides financial support for state and local governments.

Aluminium: The most-liquid SHFE 2104 aluminium contract ended the day 2.18% lower at 17,020 yuan/mt.

Zinc: The most-active SHFE 2104 zinc contract fell 1.52% to close the day at 21,340 yuan/mt, with open interest adding 725 lots to 71,800 lots. Market sentiment calmed down after the $1.9 trillion stimulus package was passed.

Nickel: The most-traded SHFE 2104 nickel contract ended the day 2.44% lower at 138,640 yuan/mt, after earlier hitting a more than one-week low at 138,000 yuan/mt, with open interest losing 12,046 lots to 115,679 lots.

Lead: The most-liquid SHFE 2104 lead contract finished the day 2.51% lower at 15,330 yuan/mt after hitting a more than two-week low at 15,250 yuan/mt earlier in the session. SHFE lead is likely to weaken this week, but expectations of rising inflation and relatively high production costs of secondary lead will support lead prices. Downstream lead-acid battery makers have started restocking raw materials.

Tin: The most-traded SHFE 2104 tin contract plunged 3.24% to close the day at 182,310 yuan/mt, after hitting a one-week low at 181,170 yuan/mt earlier in the session, with open interest decreasing 3,426 lots to 17,299 lots.