SMM Evening Comments (May 13): Nonferrous metals on the SHFE fell across the board, nickel plunged 2.65%

SHANGHAI, May 13 (SMM) – SHFE nonferrous metals all closed lower on Thursday. Copper shed 0.52%, aluminium fell 1.3%, zinc dropped 2.01%, nickel slumped 2.65%, lead declined 1.99% and tin slid 2.05%.

Social inventories of primary aluminium across eight consumption areas in China, including SHFE warrants, declined 54,000 mt from the week before to 1.06 million mt as of May 13. Stocks shrank in Wuxi, Nanhai and Gongyi. 

SMM data showed that stocks of 6063 aluminium billet across the five major consumption areas – Foshan, Wuxi, Huzhou, Changzhou and Nanchang – in China dropped 33,900 mt from the previous week to 105,200 mt as of May 13. Stocks shrank by 56% in Huzhou and dropped 12,000 mt in Foshan. Trades were active this week as falling aluminium prices encouraged downstream users to restock cargoes.

Copper: The most-traded SHFE 2106 copper contract finished the day 0.52% lower at 75,970 yuan/mt, with open interest decreasing 6,580 lots to 132,000 lots.

Aluminium: The most-active SHFE 2106 aluminium contract fell 1.3% to close the day at 19,675 yuan/mt, with open interest losing 16,361 lots to 197,000 lots. Li Keqiang presided over the executive meeting of the State Council, demanding effective response to the excessive rise of commodity prices and its associated effects, and US consumer price index (CPI) in April was significantly higher than market expectations. These weighed on aluminium prices, and the June contract may fall below 19,500 yuan/mt tonight.

Zinc: The most-liquid SHFE 2106 zinc contract slid 2.01% to end the day at 21,990 yuan/mt, with open interest losing 6,917 lots to 72,249 lots. Pressure above from the five-day moving average will be watched tonight, and zinc prices are likely to decline further.

Nickel: The most-traded SHFE 2106 nickel contract plunged 2.65% to finish the day at 128,780 yuan/mt, with open interest decreasing 11,486 lots to 89,678 lots.  

Lead: The most-active SHFE 2106 lead contract closed the day 1.99% lower at 15,305 yuan/mt, with open interest decreasing 1,063 lots to 50,240 lots. Spot trades improved slightly today, and the amount of cargoes in the market increased as smelters resumed production. Support below from the 20-day moving average will be monitored tonight.

Tin: The most-liquid SHFE 2107 tin contract dropped 2.05% to end the day at 192,230 yuan/mt, with open interest losing 1,145 lots to 31,658 lots, and it is expected to move between 188,000-196,000 yuan/mt tonight.