SMM Evening Comments (May 17): Shanghai nonferrous metals closed mostly higher, copper fell 0.07%

Published: May 17, 2021 18:00 (GMT+8)

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SHFE nonferrous metals rose for the most part on Monday May 17 as investors reacted to the release of Chinese economic data while also monitoring the Covid situation in places such as Taiwan, which has seen a recent spike in domestic infections.

SHANGHAI, May 17 (SMM) – SHFE nonferrous metals rose for the most part on Monday May 17 as investors reacted to the release of Chinese economic data while also monitoring the Covid situation in places such as Taiwan, which has seen a recent spike in domestic infections.

Tin, the best performer, rose 2.5%, lead advanced 0.6%, nickel went up 1.98%, zinc climbed 1.84% and aluminium gained 1.39%, while copper fell 0.07%.

The ferrous complex closed mixed. Hot-rolled coil decreased 5.09%, rebar dropped 2.86%, while iron ore rose 0.93%.

Copper: The most-traded SHFE 2106 copper contract finished the day 0.07% lower at 74,750 yuan/mt. Open interest fell 4,072 lots to 121,419 lots. China's economic strengthened and improved in April, boosting market sentiment. New housing starts and US Building Permits will be monitored tonight. The market expects that the data will still improve, and the market still has positive feelings about restoring confidence in the economy. SHFE copper is waiting for LME copper to exert its strength again to boost the guidance and confidence of domestic bulls.

Aluminium: The most-liquid SHFE 2106 aluminium contract finished the day 1.39% higher at 19,700 yuan/mt. Open interest fell 9,152 lots to 170,070 lots. China's regular meeting pays more attention to the rise of commodity prices, which makes short-term aluminum prices and recent aluminum prices fall back. However, social stocks of aluminium ingot decreased smoothly today, which formed a certain support for the bottom of aluminium prices. It is still in the peak season of aluminium consumption from May to June, and stocks will continue to fall. It is expected that the contract will continue to fluctuate at a high level tonight, and may continue to touch a high level.

Zinc: The most-active SHFE 2106 zinc contract closed down 1.84% at 22,380 yuan/mt. Open interest fell 981 lots to 68,139 lots. SMM data showed that social inventories of refined zinc ingots across Shanghai, Tianjin, Guangdong, Jiangsu, Zhejiang, Shandong and Hebei decreased 5,100 mt from last Friday May 14 to 171,200 mt as of Monday May 17. The stocks were down 16,700 mt from May 10. On fundamentals, the supply of zinc ingots continued to be loose in May, and the spot market traded generally under the high zinc prices, which still limited the upward momentum of zinc prices. Whether zinc prices could stand firm above the 20-day moving average will be monitored tonight. Zinc prices are expected to remain high and consolidate.

Nickel: The most-traded SHFE 2106 nickel contract ended the day 1.98% higher at 130,790 yuan/mt today. Open interest fell 2,648 lots to 86,995 lots.

Lead: The most-traded SHFE 2106 lead contract ended the day 0.6% higher at 15,210 yuan/mt. Open interest rose 312 lots to 49,808 lots. Social inventories of lead ingots across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin rose 1,900 mt from last Friday May 14 to 85,900 mt as of Monday May 17, an SMM survey showed. This was up 16,700 mt from last Monday May 10. Recently, the traditional off-season of batteries has not yet ended, and the long and short position factors are intertwined. The change of the premium of secondary lead should be monitored after the lead prices stopped falling.

Tin: The most-liquid SHFE 2107 tin contract fell to a session low of 193,250 yuan/mt and finished the day 2.33% higher at 197,420 yuan/mt today. Open interest rose 2,075 lots to 33,553 lots. The contract is expected to fluctuate at high in the near term. Pressure above will be seen from 199,000 yuan/mt today. Support below will be seen from 190,000 yuan/mt today.

Evening comments Copper Aluminium Zinc Nickel Lead Tin

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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