China: SHFE base metals inventories show mixed trends

The Shanghai Futures Exchange (SHFE) in China recently released data showing variations in inventory levels of base metals in its registered warehouses.

In China, the production rate of downstream industries is decreasing due to lower consumer demand. While reducing output can alleviate inventory pressure, it alone cannot solve the issue of oversupply as demand is currently in a seasonal slowdown. The market is still facing significant inventory challenges.

Additionally, it is crucial for the market to take note of the possibilities arising from the import side due to the narrowing price gap between domestic and overseas markets.

Commodity-wise inventories

• Aluminium
  
  

In SHFE warehouses, aluminium inventories increased this week by 3,940 t, with total inventory assessed at 102,019 t, up from 98, 079 t last week. Social inventory of aluminium ingots rose but remained at a low level.

SHFE aluminium futures inched down by 0.5% to RMB 17,935/t ($2,483/t) this week.

• Copper
  
  

Copper stocks in SHFE warehouses increased to 74,638 t this week from 68,313 t last week. Simultaneously, copper futures increased by 0.2% w-o-w to RMB 67,948/t ($9,410/t).

• Nickel
  
  

Nickel stocks experienced a significant decline this week and were assessed at 2,583 t, down from last week's 3,133 t. Meanwhile, nickel prices increased w-o-w to RMB 161,416/t ($22,353/t) compared to RMB 158,300/t ($21,921/t) last week.

• Zinc
  
  

Zinc inventories in major SHFE warehouses moved downward. Currently, the inventory stands at 51,929 t compared to 59,474 t last week. Meanwhile, future prices inched up by 0.6% w-o-w to RMB 20,107/t ($2,784/t).

• Lead
  
  

Lead inventories recorded a rise of 8%, reaching 29,108 t from last week's 26,946 t. Lead futures witnessed a slight increase of 0.3% w-o-w to RMB 15,536/t ($2,151/t).