SMM Evening Comments (Jun 4): Shanghai nonferrous metals fell across the board ahead of US jobs report

SHANGHAI, Jun 4 (SMM) – SHFE nonferrous metals broadly fell on Friday June 4 as investors looked ahead to a key U.S. jobs report later in the session.

Copper led the losses and slumped 2.94%, aluminium slipped 1.3%, nickel eased 1.87%, zinc lost 2.04%, tin went down 0.8% and lead decreased 2.15%.

The ferrous complex closed mixed. Rebar advanced 1.36%, hot-rolled coil rose 0.22%, while iron ore fell 1.85%.

Copper: The most-traded SHFE 2107 copper contract finished the day 2.94% lower at 70,910 yuan/mt. Open interest rose 990 lots to 138,875 lots. Stocks of copper in Shanghai bonded areas decreased on smaller arrivals. SMM data showed that the stocks fell 3,300 mt from the prior week to 412,200 mt as of Friday June 4.

Aluminium: The most-liquid SHFE 2107 aluminium contract finished the day 1.3% lower at 18,280 yuan/mt. Open interest fell 3,459 lots to 202,421 lots.

Zinc: The most-active SHFE 2107 zinc contract closed down 2.04% at 22,520 yuan/mt. Open interest fell 14,901 lots to 92,684 lots. The data of ADP employment and ISM service industry in the US showed that the economy was recovering rapidly, which continued to arouse the worry of the Federal Reserve's code reduction and easing. US stocks fell, US bond yields and US dollar index rose, nonferrous metals were generally weak, and zinc prices went down. On the fundamentals, the supply of smelting continued to recover in June and July, suppressing zinc prices. 20-day moving average will be monitored tonight, and zinc prices are expected to continue to weaken under pressure.

Nickel: The most-traded SHFE 2107 nickel contract ended the day 1.87% lower at 131,350 yuan/mt today. Open interest fell 11,288 lots to 127,667 lots. Nickel ore inventories across all Chinese ports increased 252,000 wmt from May 28 to 5.95 million wmt as of June 4, showed SMM data.

Lead: The most-traded SHFE 2107 lead contract ended the day 2.15% lower at 15,305 yuan/mt. Open interest rose 8,496 lots to 71,879 lots. Domestic social inventories of lead ingots piled up as scheduled, while TCs for concentrate and smelting raw materials such as battery scrap remained firm. The spot price of SMM1# lead fell below 15,000 yuan/mt, and SHFE lead went up in the afternoon trading. As a result, the shipping enthusiasm of cargo holders decreased, and the purchasing enthusiasm of downstream enterprises improved slightly, while the overall consumption situation still did not improve significantly. The price difference between the contract and the spot was still too large, and the intention to deliver the position did not decrease. The support from 15,300 yuan/mt still should be monitored tonight.

Tin: The most-liquid SHFE 2107 tin contract fell to a session low of 200,110 yuan/mt and finished the day 0.8% lower at 204,050 yuan/mt today. Open interest fell 1,947 lots to 29,620 lots.