SMM Evening Comments (May 31): Shanghai nonferrous metals rose across the board as China manufacturing activity grew in May

Published: May 31, 2021 18:00 (GMT+8)

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SHFE nonferrous metals closed higher across the board on Monday May 31 as investors reacted to the release of China's official manufacturing Purchasing Managers' Index for May.

SHANGHAI, May 31 (SMM) – SHFE nonferrous metals closed higher across the board on Monday May 31 as investors reacted to the release of China's official manufacturing Purchasing Managers' Index for May.

Tin was the best performer with a rise of 1.75%. Copper rose 0.85%, aluminium advanced 0.51%, nickel climbed 1.73%, zinc increased 0.02% and lead went up 0.74%.

The ferrous complex also rose across the board. Iron ore increased 5.28%, rebar rose 2.45%, and hot-rolled coil climbed 1.27%.

Copper: The most-traded SHFE 2107 copper contract finished the day 0.85% higher at 73,950 yuan/mt. Open interest rose 1,191 lots to 210,172 lots.

Aluminium: The most-liquid SHFE 2107 aluminium contract finished the day 0.51% higher at 18,825 yuan/mt. Open interest fell 2,597 lots to 235,330 lots.

Zinc: The most-active SHFE 2107 zinc contract closed up 0.02% at 22,900 yuan/mt. Open interest fell 3,503 lots to 104,060 lots. SMM data showed that social inventories of refined zinc ingots across Shanghai, Tianjin, Guangdong, Jiangsu, Zhejiang, Shandong and Hebei decreased 1,100 mt from last Friday May 28 to 154,400 mt as of Monday May 31. The stocks were down 7,100 mt from May 24.

Nickel: The most-traded SHFE 2107 nickel contract ended the day 1.73% higher at 132,890 yuan/mt today. Open interest fell 1,624 lots to 124,181 lots.

Lead: The most-traded SHFE 2107 lead contract ended the day 0.74% higher at 15,625 yuan/mt. Open interest fell 984 lots to 56,843 lots. The overall trend was slightly stronger, while the consumption drive of lead ingots was still insufficient at the end of May, and the price difference between the contract and the spot further widened, prompting the enthusiasm of the cargo holders to hand over the warehouse again. In addition, as some commonly used delivery warehouses have reached the upper limit of the storage capacity, social inventories of lead ingots continued to increase, while the growth rate slowed down. The power curtailment in Yunnan had a certain impact on refined lead output. Whether the nonferrous metals could continue to generally increase to boost the contract to stand firm at 15,600 yuan/mt will be monitored tonight.

Tin: The most-liquid SHFE 2107 tin contract fell to a session low of 205,880 yuan/mt and finished the day 1.75% higher at 209,000 yuan/mt today. Open interest fell 1,176 lots to 37,996 lots. Due to the power curtailment and production suspension in Yunnan producing areas, the supply side further tightened to support the strong rise of tin prices. The shortage of domestic spot circulation will continue to support the trend of tin prices and the impact of macro-policy dynamics on the trend of futures prices will be monitored. Pressure above will be seen from 210,000 yuan/mt today. Support below will be seen from 197,000 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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