China: SHFE base metal futures show mixed trends; copper increases 7% w-o-w

The most recent weekly inventory report from the Shanghai Futures Exchange (SHFE) indicated a mixed trend in base metal inventories, with copper seeing a hike of 7%, while nickel decreased by 2.2%. Similarly, base metal prices experienced a downtrend of 1.9% in nickel, while lead prices increased by 0.9%, compared to the previous week.

China's bond market rally is still going strong in 2024, driven by expectations of interest-rate cuts after sluggish economic data at the end of last year. The yield on 10-year government bonds fell to 2.54%, the lowest since April 2020. The People's Bank of China, along with major banks lowering deposit rates, has fueled anticipation that Beijing might take more steps to boost the economy by easing monetary policy.

Commodity-wise stocks and prices

Copper

Copper stocks in SHFE warehouses increased for the second consecutive week to 33,130 t by 7.2% this week from 30,905 t last week. In contrast, copper futures inched down by 0.7% to RMB 68,760/t ($9,681/t).

Aluminium

In SHFE warehouses, aluminium inventories decreased by 2% in the third consecutive week to 96,637 t from 99,029 t last week. In contrast, futures increased by 0.7% w-o-w to RMB 19,475/t ($2,742/t). Notably, aluminium inventory witnessed a third consecutive outflow.

Nickel

Nickel stocks reached 13,464 t from last week's 13,765 t, inching down by 2.2% w-o-w. Similarly, nickel prices were down marginally by 1.9% w-o-w to RMB 127,922/t ($18,010/t) compared to RMB 129,922/t ($18,292/t) last week.

Zinc

Zinc inventories in major SHFE warehouses witnessed a hike of 2.8%, after two weeks of material inflow. The inventory stood at 21,814 t, compared to 21,215 t last week. Future prices went up by 0.4% w-o-w to RMB 21,515/t ($3,029/t).

Lead

Lead inventories recorded a fall in third week in a row of 0.8% and stood at 52,449 t against last week's 52,884 t. Meanwhile, lead futures were up by 0.9% w-o-w to RMB 15,914 t ($2,240/t).