[SMM Analysis] LCO Prices Remain Stable, December Production Declines  

SHFE 2404 tin contract saw limited fluctuations last Friday night, closing at 226,800 yuan/mt, down 0.24%.

At last Friday’s night session, the most-traded SHFE 2405 aluminum contract opened at 19,445 yuan/mt, with its lowest and highest at 19,400 yuan/mt and 19,595 yuan/mt before closing at 19,510 yuan/mt, up 110 yuan/mt or 0.57%.

Tesla has reduced production of electric cars at its China factory due to slow growth in new energy car sales and fierce market competition. Employees have been instructed to work 5 days a week instead of the usual 6 and a half days, with no clear timeline on when normal production will resume. Competition in China is increasing, with Tesla's shipments down in the first two months of 2024, and demand for electric cars in other major regions like the US and Europe also slowing down. Some production lines at Tesla's Shanghai factory, including the battery workshop, are facing longer shutdowns, with production restrictions expected to extend until April.

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Overnight, the U.S. trade deficit narrowed in November as domestic demand slowed, causing imports of consumer goods to reach their lowest level in a year. The U.S. Department of Commerce’s Bureau of Statistics said the trade deficit shrank 2.0% in November to $63.2 billion. It is understood that economists had previously predicted that the deficit would increase to US$65 billion. If this trend continues in December, trade may have no effect on economic changes in the fourth quarter.

The SHFE market was closed last Friday evening. LME copper opened at $8620.5/mt and closed at $8536.5/mt.

As of November 7, the operating rates of 34 EF steel mills that mainly produced construction steel were up 4.35 percentage points WoW at 46.38% as profits recovered significantly amid strong finished steel prices.

In October 2023, the domestic output of refined lead was 321,800 mt, a gain of 1.89% month-on-month and 8.83% year-on-year. The cumulative output from January to October 2023 increased by 15.6% year-on-year. Total production capacities of enterprises in the survey totalled 5.84 million mt in 2023.