SMM Evening Comments (Jun 9): Shanghai nonferrous metals rose across the board, lead advanced 2.93%

SHANGHAI, Jun 9 (SMM) – SHFE nonferrous metals closed higher across the board on Wednesday June 9 as China's producer inflation data for May came in higher than expected.

Lead was the best performer with a rise of 2.93%. Copper rose 0.17%, aluminium advanced 0.14%, nickel climbed 1.7%, tin increased 1.63% and zinc went up 0.44%.

The ferrous complex also rose across the board. Iron ore increased 3.98%, rebar rose 1.31%, and hot-rolled coil climbed 2.09%.

Copper: The most-traded SHFE 2107 copper contract finished the day 0.17% higher at 71,510 yuan/mt. Open interest rose 1,277 lots to 130,944 lots.

Aluminium: The most-liquid SHFE 2107 aluminium contract finished the day 0.14% higher at 18,390 yuan/mt. Open interest fell 1,700 lots to 191,341 lots.

Zinc: The most-active SHFE 2107 zinc contract closed up 0.44% at 22,685 yuan/mt. Open interest rose 839 lots to 92,801 lots. The increase of PPI in May was the highest since 2008, especially the rapid increase of commodity prices, which led to a sharp increase in enterprise costs and reduced profit margins. In addition, the National Development and Reform Commission held a working symposium on June 9, proposing to closely track the trend of commodity prices and do a good job in price forecasting and early warning, which may curb the upside space of zinc prices. On fundamentals, Yunnan officially announced that it will gradually increase the power load of nonferrous metal smelting and other industries. According to SMM survey, some enterprises have recovered half of their capacity utilisation rate. However, stocks kept falling before the Dragon Boat Festival, which was the main logic to support the current high fluctuation of zinc prices. Whether stocks will pile up after the Dragon Boat Festival to lead to the downward trend of zinc prices will be monitored.

Nickel: The most-traded SHFE 2107 nickel contract ended the day 1.7% higher at 132,800 yuan/mt today. Open interest rose 17,762 lots to 129,421 lots.

Lead: The most-traded SHFE 2107 lead contract ended the day 2.93% higher at 15,450 yuan/mt. Open interest fell 14,618 lots to 63,041 lots. The contract will test support from 15,300 yuan/mt tonight.

Tin: The most-liquid SHFE 2107 tin contract fell to a session low of 204,710 yuan/mt and finished the day 1.63% higher at 207,600 yuan/mt today. Open interest rose 2,518 lots to 29,651 lots. The guidance of LME tin trend on the trend of SHFE tin will be monitored. The tight domestic spot supply constituted a certain support for SHFE tin. Pressure above will be seen from 210,000 yuan/mt today. Support below will be seen from 200,000 yuan/mt today.