China: SHFE base metals futures mixed; zinc drops 16% w-o-w

The most recent weekly inventory report from the Shanghai Futures Exchange (SHFE) indicated a mixed trend in base metal inventories, with zinc saw a fall over 16% while copper increased by 7.6%. In contrast, base metal prices experienced an uptick of up to 2.3%, except for nickel which fell by 1.4%, compared to the previous week.

In line with the 14th five-year plan, China aims to bolster its economy by prioritising the restoration and expansion of domestic consumption. The focus is on stabilising bulk consumption and promoting service-oriented consumption.

To overcome challenges such as a property slump and global economic uncertainties, the government plans to implement measures to ensure a swift recovery. Additionally, there is a strategic emphasis on advancing high-technology development to address challenges posed by technology export restrictions imposed by certain countries.

Commodity-wise stocks and prices

Copper

After last weeks of inventory outflow, copper stocks in SHFE warehouses increased by 7.6% to 30,905 t this week from 28,718 t last week. Similarly, copper futures inched up by 0.8% to RMB 69,260/t ($9,784/t).

Aluminium

In SHFE warehouses, aluminium inventories decreased by 3% to 99,029 t from 102,112 t last week. In contrast, futures increased by 2.3% w-o-w to RMB 19,336/t ($2,732/t). Notably, aluminium inventory witnessed a third consecutive outflow.

Nickel

Nickel stocks reached 13,765 t from last week's 13,300 t, inching up by 3.5% w-o-w. Conversely, nickel prices were down marginally by 1.4% w-o-w to RMB 129,922/t ($18,354/t) compared to RMB 131,826/t ($18,623/t) last week.

Zinc

Zinc inventories in major SHFE warehouses witnessed a fall of 16.6%, after two weeks of material inflow. The inventory stood at 21,215 t, compared to 25,440 t last week. Unlike, future prices went up by 2.1% w-o-w to RMB 21,433/t ($3,028/t).

Lead

Lead inventories recorded a fall of 6.7% and stood at 52,884 t against last week's 56,657 t. Meanwhile, lead futures were up by 0.7% w-o-w to RMB 15,778 t ($2,229/t).