SMM Evening Comments (Jul 6): Shanghai nonferrous metals rose for the most parts, aluminium fell 0.65%

SHANGHAI, Jul 6 (SMM) – SHFE nonferrous metals, except for aluminium, all moved up after OPEC+ deadlock on the oil production increase plan.

Tin, the best performer, rose 2.41%, copper increased 1.85%, lead gained 0.16%, zinc went up 1.02%, and nickel advanced 1.2%, while aluminium fell 0.65%.

The ferrous complex all went up. Iron ore increased 2.84%, rebar rose 2.93%, and HRC gained 3.24%.

Copper: The most active SHFE 2108 copper concentrate gained 1.85% to close at 70,100 yuan/mt today, with open interest up 2,462 lots to 124,000 lots.

OPEC+ plan of production increase was suspended amid the deeper conflict between Saudi Arabia and UAE. The expectation of tighter supply drove a sharp increase in oil prices. Biden governments is reported to urge OPEC+ to put forward a compromise proposal for the production increase. US Fed and ECB did not make many statements, and the market direction is unclear without much economic data.

The 20-day moving average has turned from the pressure line to the support line. The US June PMI of non-manufacturing industry will be the focus tonight.

Aluminium: The most traded SHFE 2108 aluminium contract finished the day 0.65% lower at 19,130 yuan/mt today. Bulls’ open interest dropped 705 lots to 237,000 lots. At fundamentals, stocks remained low, and the release of national reserves had limited impact on the spot market. SHFE aluminium is expected to trade between 18,800-19,250 yuan/mt tonight. The focus will be kept on the impact of macro news on price fluctuations.

Lead: The most active SHFE lead closed 0.16% higher at 15,830 yuan/mt today, with open interest up 21 lots to 63,358 lots.

Bulk trade in the spot market remained sluggish today. Holders were actively preparing for deliveries, and domestic social inventories of lead ingots kept rising as expected. The storage capacities in Jiangsu and Zhejiang were tight. Macro atmosphere was relatively bullish. The opened export window may relieve the inventory pressure. Tonight’s focus will be whether LME lead can keep rising and drive up SHFE lead to test 15,850 yuan/mt.

Zinc: The most traded SHFE 2108 zinc contract increased 1.02% to close at 22,295 yuan/mt today, with open interest up 1,499 lots to 98,423 lots.

Nickel: The most active SHFE 2108 nickel contract rose 1.2% to end at 138,020 yuan/mt today, with open interest up 1,029 lots to 135,473 lots.

Tin: The most traded SHFE 2108 tin contract finished the day 2.41% higher at 219,220 yuan/mt today, with open interest up 3,010 lots. The August contract is in a long-term upward trend, unlikely to be changed without significant fundamental stimulus. The near term focus will be the pressure at 220,000 yuan/mt and the support at 217,000 yuan/mt.