SMM Morning Comment For SHFE Base Metals September 4

SHANGHAI, Sep 4 (SMM) –

Copper

LME copper prices opened at $8520.5/mt and closed at $8491.5/mt last Friday evening, a rise of 0.65%, with the high-end of $8599/mt and the low-end of $8479/mt. Trading volume was 22,000 lots and open interest stood at 275,000 lots. The most active SHFE 2310 copper contract prices opened at 70150 yuan/mt and closed at 69570 yuan/mt last Friday evening, up 0.14%, with the high-end of 70150 yuan/mt and the low-end of 69540 yuan/mt. Trading volumes stood at 44,000 lots and open interest stood at 162,000 lots. According to data released by the US Department of Labour last Friday, the US initial jobless claims stood at 187,000 in August, lower than market expectations. The unemployment rate surged to 3.8% in August, up from 3.5% in July. As of Friday September 1, SMM data showed that copper inventory across major Chinese markets stood at 88,600 mt, up 11,200 mt from last Monday and 14,400 mt from two Fridays ago. Inventories rebounded from a low level. The increase in inventory in east China was mainly due to a large increase in imported copper, while in Guangdong, inventory increased slightly due to more shipments from smelters in Guangdong at the end of August. In terms of consumption, downstream funds are relatively abundant at the beginning of the month, and demand will increase accordingly. However, attention needs to be paid to whether copper prices will continue to rise and suppress consumption. Copper prices are expected to remain high with the support of macro sentiment.

Aluminum

Last Friday night, the most-traded SHFE 2310 aluminium contract opened at 19,330 yuan/mt, with the lowest and highest prices at 19,220 yuan/mt and 19,585 yuan/mt before closing at 19,365 yuan/mt, up 35 yuan/mt or 0.18% from the previous trading day. LME aluminium opened at $2,206/mt on Friday with its high and low at $2,260/mt and $2,206/mt respectively before closing at $2,237/mt.

On the macro side, domestic favorable policies wield boosting effects on markets significantly. But speculation about a Fed rate hike added to macro uncertainty. In the fundamentals, the proportion of molten aluminum output remained high and the continuous low level of aluminum ingot inventory brought support to aluminum prices. Entering into the traditional peak seasons of September and October, there are certain optimistic expectations on the consumer side. Under multiple factors’ influence, the short-term aluminum price is expected to fluctuate at a high level, but it is necessary to closely observe the consumption changes in the peak season.

Lead

LME lead prices opened at $2218/mt and gained 1.46% to settle at $2255.5/mt in the night trading last Friday, with the high-end of $2301/mt.

The most active SHFE lead contract prices opened at 17150 yuan/mt and gained 275 yuan/mt or 1.65% to close at 16985 yuan/mt last Friday evening, with the high-end of 17540 yuan/mt and the low-end of 16915 yuan/mt. Open interest decreased 4402 lots to 104,000 lots.

Zinc

LME zinc opened at $2436.5/mt last Friday evening and closed up $53/mt or 2.18% at $2487/mt. Trading volume rose to 10308 lots, and open interest decreased by 1273 lots to 197,000 lots. LME zinc inventory shed by 400 mt to 153575 mt. The United States added 187,000 jobs in August, highlighting the resilience of the labor market, and the strength of the US dollar exerted pressure.

The most active SHFE 2310 zinc contract prices opened at 21370 yuan/mt and closed at 21370 yuan/mt last Friday evening, up 285 yuan/mt or 1.35%. The trading volume was down to 82859 lots, and open interest decreased 477 lots to 109,000 lots. Domestic data performed well. The PMI manufacturing new orders index entered the expansion range for the first time since March 2023. At the same time, real estate policies in various regions of China pushed up non-ferrous metals prices across the board.

Tin

The most traded SHFE nickel contract opened at 164,410 yuan/mt at the night session on September 1, an increase of 3,360 yuan/mt from the previous trading day. The trading volume increased by 11,469 lots and the open interest decreased by 507 lots. It shows that the longs also left the market in large numbers when the shorts made profits, and the price may fall soon. Last Thursday night, the US announced 228,000 initial jobless claims for the week ending August 26, lower than the predicted and previous values. The data tentatively indicates that the current US job market is still resilient, and attention also should be paid to the non-farm payrolls data. In the fundamentals, last Friday’s spot market transactions were still depressed overall, and downstream demand was generally weak. In summary, nickel prices may fluctuate in the future.

Nickel

The most traded SHFE nickel contract opened at 164,410 yuan/mt at the night session on September 1, an increase of 3,360 yuan/mt from the previous trading day. The trading volume increased by 11,469 lots and the open interest decreased by 507 lots. It shows that the longs also left the market in large numbers when the shorts made profits, and the price may fall soon. Last Thursday night, the US announced 228,000 initial jobless claims for the week ending August 26, lower than the predicted and previous values. The data tentatively indicates that the current US job market is still resilient, and attention also should be paid to the non-farm payrolls data. In the fundamentals, last Friday’s spot market transactions were still depressed overall, and downstream demand was generally weak. In summary, nickel prices may fluctuate in the future.