China: SHFE base metals inventories witness sharp uptick w-o-w

China's Shanghai Futures Exchange (SHFE) has released its weekly inventory report. The report revealed a surge in inventory across non-ferrous commodity markets. SHFE prices for different commodities witnessed an uptrend w-o-w .

In August, China's factory output grew at a faster pace of 4.5%, and retail sales increased by 4.6%, reflecting positive signs of economic stabilisation. However, challenges persist, particularly in the troubled property sector, which remains a drag on growth. Analysts remain cautious about the sustainability of this recovery despite some optimism, with concerns over property investment lingering.

Commodity-wise inventories

Aluminium

In SHFE warehouses, aluminium inventories increased significantly by 18% w-o-w. Total inventories were assessed at 104,670 t, up from 88,445 t last week. SHFE aluminium futures increased by 0.69% w-o-w to RMB 19,186/t ($2,637/t).

Copper

Copper stocks in SHFE warehouses increased sharply by 19% to 65,146 t this week from 54,955 t last week. However, copper futures dipped 0.3% w-o-w to RMB 69,096/t ($9,498/t). Stocks at SHFE have fallen this week after rising for three consecutive weeks.

Nickel

Nickel stocks continued the uptrend this week to reach 5,555 t from last week's 4,968 t, up 12% w-o-w. In contrast, nickel prices inched down by 3.9% w-o-w to RMB 162,578/t ($22,348/t) compared to RMB 169,150/t ($23,251/t) last week.

Zinc

Zinc inventories in major SHFE warehouses inched up w-o-w by 0.6%. The inventory stood at 46,877 t compared to 46,579 t last week. Meanwhile, future prices were up by 1.7% w-o-w to RMB 21,640/t ($2,974/t). Although China has resumed zinc imports after a prolonged hiatus, due to increased domestic production of refined zinc, SHFE's zinc stocks have remained up.

Lead

Lead inventories witnessed a sharp rise of 33%, reaching 79,711 t against last week's 60,041 t. Lead futures prices rose slightly by 1.1% w-o-w to RMB 16,922 t ($2,326/t). The inflow of inventory is the highest in the last six months.