SMM Evening Comments (Jul 20): Shanghai nonferrous metals declined for the most part following China keeping benchmark lending rate unchanged

SHANGHAI, Jul 20 (SMM) – SHFE nonferrous metals broadly fell on Tuesday July 20. On Tuesday, China kept unchanged its benchmark lending rate for corporate and household loans — the one-year Loan Prime Rate (LPR) held steady at 3.85% while the five-year LPR was also left at 4.65%.

Shanghai nonferrous metals, except for zinc, traded lower on Tuesday July 20. Nickel shed 2.62% to lead the losses, copper decreased 1.19%, lead declined 1.33%, tin went down 1.68% and aluminium fell 1.52%, while zinc advanced 0.09%.

The ferrous complex closed mixed. Hot-rolled coil decreased 0.57% and rebar slipped 0.2%, while iron ore rose 0.57%.

Copper: The most-traded SHFE 2108 copper contract finished the day 1.19% lower at 68,130 yuan/mt. Open interest fell 1,150 lots to 102,700 lots.

The delta variant of coronavirus cast a shadow over the economic recovery, and risk aversion spread in the global market. Yesterday, the three major US stock indexes fell across the board, dragging down commodities to a certain extent. The National Development and Reform Commission said that it would continue to work with relevant departments to strengthen the monitoring and forecasting of commodity prices and organise the release of national reserves of copper, aluminium and zinc in subsequent batches. Copper reserves were put on the agenda again, and copper futures dropped sharply.

Whether the data of US real estate, the total number of new housing starts and the total number of construction permits exceed expectations, and then put pressure on copper prices will be monitored tonight.

Aluminium: The most-liquid SHFE 2108 aluminium contract finished the day 1.52% lower at 19,075 yuan/mt. Open interest fell 37,390 lots to 155,823 lots.

Zinc: The most-active SHFE 2108 zinc contract closed up 0.09% at 22,545 yuan/mt. Open interest rose 8,245 lots to 94,989 lots.

Nickel: The most-traded SHFE 2108 nickel contract ended the day 2.62% lower at 138,830 yuan/mt today. Open interest fell 27,841 lots to 97,232 lots. LME nickel fluctuated widely around $18,500/mt today. The minutes of the monetary policy meeting announced by the Reserve Bank of Australia in July will be monitored tonight.

Lead: The most-traded SHFE 2108 lead contract ended the day 1.33% lower at 15,630 yuan/mt. Open interest rose 263 lots to 49,655 lots.

Tin: The most-liquid SHFE 2108 tin contract fell to a session low of 225,500 yuan/mt and finished the day 1.68% lower at 228,210 yuan/mt today. Open interest fell 7,217 lots to 30,577 lots. In the long run, before there is no change in the fundamental contradiction between supply and demand, the contract is more likely to keep fluctuating.