SMM Evening Comments (Jul 5): Shanghai Nonferrous Metals Closed Mixed on Easing Market Sentiment

Published: Jul 5, 2022 18:00

Save

Shanghai nonferrous metals closed mixed as the economic readings were still less cheering. The US ISM manufacturing PMI registered 53 in June, a new low since June 2020, compared to estimate 54.9 and previous reading 56.1.

SHANGHAI, Jul 5 (SMM) – Shanghai nonferrous metals closed mixed as the economic readings were still less cheering. The US ISM manufacturing PMI registered 53 in June, a new low since June 2020, compared to estimate 54.9 and previous reading 56.1.

Shanghai copper fell 1.85%, aluminium lost 2.81%, lead dropped 0.76%, zinc gained 1.8%, tin shed 1.16%, and nickel rose 0.55%.

Copper: The most-traded SHFE 2208 copper closed down 1.85% or 1,130 yuan/mt at 60,110 yuan/mt, with open interest up 1,376 lots to 155,659 lots.

On the macro front, the US ISM manufacturing PMI registered 53 in June, a new low since June 2020, compared to estimate 54.9 and previous reading 56.1. The new orders index fell below 50.

In the spot market, purchases were not quite active, and the spot premiums kept falling. But the backwardation of SHFE front-month and next-month contract, which was less than 100 yuan/mt, appealed the traders to restock, underpinning the spot premiums. In morning trade, standard-quality copper was in premiums of 100 yuan/mt with few transactions, then the goods holders lowered the premiums to 80-90 yuan/mt, but the transactions were still sluggish. In afternoon trade, there were sources in premiums of 70 yuan/mt, and some were traded at 60 yuan/mt as traders forced down the prices. The market could hardly hold firm to the prices with the constant inflow of imports.

Aluminium: The most-traded SHFE 2208 aluminium closed down 2.81% or 535 yuan/mt to 18,485 yuan/mt, with open interest up 11,742 lots to 193,265 lots.

Aluminium supply is still on the rise, while the latest social inventory statistics result showed that aluminium social inventory has stopped falling. Aluminium billet inventory also rose with a weekly increase of 2,300 mt, indicating the impact of seasonal low. Aluminium prices are still pressured on the fundamentals, and are expected to fall in the near term.

Lead: The most-traded SHFE 2208 lead closed down 0.76% or 115 yuan/mt at 14,955 yuan/mt, with open interest up 1,421 lots to 52,536 lots.

In the spot market, discounts of smelters narrowed slightly after lead prices fell, but the downstream turned away from the high prices, and the transactions with small orders were still think. The market shall watch if the cost of secondary refined lead could offer strong support.

Zinc: The most-traded SHFE 2208 zinc closed up 1.8% or 410 yuan/mt at 23,130 yuan/mt, with open interest up 5,902 lots to 118,485 lots.

SHFE zinc rose slightly in the morning when US dollar index dropped, but lost some of its gains when the index surged in the afternoon. In addition, the lingering pandemic in Shanghai and Beijing still suppressed the confidence of longs to some extent, though the impact is weakening marginally.

Tin: The most-traded SHFE 2208 tin closed down 1.16% or 2,250 yuan/mt at 191,810 yuan/mt, with open interest up 4,017 lots to 51,805 lots.

In the spot market, smelters’ quotes were relatively stable in morning trade, and were less firm to their prices despite rebounding futures prices. The premiums offered by traders were flat from yesterday, and the overall transactions were modest. SHFE warrants fell 96 lots to 3,723 lots, and LME tin inventory rose 24 mt to 3,585 mt on July 4.

Nickel: The most-traded SHFE 2208 nickel closed up 0.55% or 920 yuan/mt at 168,790 yuan/mt, with open interest up 3,862 lots to 76,810 lots.

The subsiding expectations for further rate hikes recently boosted nickel prices to some extent.

On the supply side, traders were generally wait-and-see amid greatly fluctuating nickel prices recently, and the purchasing of Jinchuan nickel by traders were less than expected, resulting in less sources available in Shanghai.

On the demand side, the market sentiment has been affected by resurging pandemic in Wuxi over the weekend, but the impact is unlikely to last long or stay strong. The transaction in Foshan, after the typhoon Chaba, has returned to normal, with the local market being little affected. In terms of alloy, the downstream was generally bearish on nickel prices, which, coupled with few orders except the military sector, resulted in less demand for nickel.

Nickel prices are likely to remain rangebound amid weak demand and rising primary nickel supply in the long run.

[Disclaimer: The above representation and data is based on market information SMM believes to be reliable at the time of acquiring as well as the comprehensive assessment by SMM research team, and any and all information provided in this article is for reference only. This article does not constitute a direct recommendation for investment or any decisions in any form and clients shall act on their own discreet and any decisions made by clients are not within the responsibility of SMM.]

Market

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.

For any inquiries or for more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

Aug 15, 2026 02:58

Panguna Copper Mine Moves Closer to Potential Redevelopment as Lloyds Metals Receives Preparatory Works Approval

According to foreign media reports, Lloyds Metals & Energy has been authorized to undertake preparatory works and feasibility activities aimed at assessing the potential redevelopment of the Panguna copper-gold mine in Bougainville, Papua New Guinea, nearly four decades after the operation was shut down. The Autonomous Bougainville Government granted the authorization on August 7, allowing Lloyds to carry out an approved programme of preparatory and feasibility work required to assess and plan the future redevelopment of the mine. Lloyds is acting as the approved development partner of government-owned Bougainville Minerals, which holds the mining lease covering Panguna. The project represents a potentially significant source of long-term copper supply. Panguna's remaining reserves are estimated at approximately 5.3 million tonnes of copper and 19.3 million oz of gold, while Lloyds plans to revalidate the project's resource base as part of the redevelopment process. The mine has remained closed since 1989. The latest authorization follows the granting of a 25-year mining lease to Bougainville Minerals in June, providing a framework for further evaluation of the dormant asset. However, the current approval does not permit construction or copper production to begin. Any progression into those stages will require additional approvals, meaning a potential restart remains subject to further technical, regulatory and development work. The renewed progress at Panguna is notable given the scale of the historical deposit and growing efforts globally to develop additional copper supply. The immediate impact on mine supply remains limited, but successful feasibility work and resource revalidation could provide greater clarity on whether one of the world's largest dormant copper assets can eventually return to production.

Aug 15, 2026 02:58

Aug 15, 2026 02:45

Bezant Resources Completes First Blast at Namibian Copper-Gold Project, Aiming for Concentrate Production

Bezant Resources PLC has completed the first blast at the Hope open pit within its 90%-owned Hope & Gorob copper-gold project in Namibia, marking a further step toward mining and future concentrate production at the project. The initial blast involved approximately 20,000 tonnes of material and is expected to liberate around 2,000 tonnes of commercially viable mineralisation. Preliminary evaluation of the exposed mineralisation indicates that its location and grade are broadly consistent with the project's existing geological block model. Following the blast, grade-control work will compare assay results from blasthole samples with the exposed mineralisation to refine ore selection. Mining and transportation of run-of-mine (ROM) ore to the Tsaoxaub Metals flotation plant are expected to begin shortly, where material will be stockpiled ahead of future plant commissioning. Preparations for further mining are also progressing. Blastholes have already been drilled for a second blast, while the mining contractor has commenced ground clearance and separation of ore and waste for haulage. Recruitment of plant operators is ongoing following the appointment of the plant site manager, while the mine geology team is working with external consultants to validate the existing block model. The first blast represents an important operational milestone as Hope & Gorob moves closer to the processing stage. The next key developments will be the delivery of ROM ore to the plant, commissioning of the flotation facility and eventual production of saleable concentrate, providing clearer indications of the project's transition from development into copper-gold production.

Aug 15, 2026 02:45

Aug 15, 2026 02:32

Antofagasta Cuts 2026 Copper Output Guidance Following Los Pelambres Shutdown

According to foreign media reports, Chilean copper producer Antofagasta has lowered its 2026 copper production guidance following a weather-related shutdown at its Los Pelambres mine, reducing expected output at a time when global copper mine supply remains under pressure. Antofagasta now expects to produce 625,000–655,000 tonnes of copper in 2026, compared with its previous guidance of 650,000–700,000 tonnes. The revised range lowers the midpoint of the company's production outlook by 35,000 tonnes and reduces the upper end of its forecast by 45,000 tonnes. The downgrade follows the temporary shutdown of Los Pelambres in July after extreme rainfall affected Chile's Coquimbo Region. Although no significant damage was reported to major infrastructure, repairs are required to some pipeline platforms and water-management systems following the disruption. Despite lower production, stronger copper prices supported Antofagasta's financial performance during the first half of 2026. EBITDA increased 27% year on year to $2.84 billion, while operating cash flow rose 53% to $2.77 billion. First-half cash costs declined 8% year on year to $1.22/lb, although the company previously indicated that full-year costs are expected to increase amid persistently elevated fuel prices. From a copper-market perspective, the guidance reduction represents a further downward adjustment to expected mine supply from Chile, the world's largest copper-producing country. The disruption at Los Pelambres also highlights the continued vulnerability of near-term supply to operational and weather-related interruptions, with Antofagasta's reduced production outlook adding to existing constraints on global copper mine growth.

Aug 15, 2026 02:32