China: SHFE's base metal inventories fall by over 16% largely, w-o-w

The most recent weekly inventory report from the Shanghai Futures Exchange (SHFE) indicates a reduction of up to 16% in base metal inventories, with the exception of zinc, which saw a slight increase of 5.5%. Conversely, base metals prices experienced an uptick of up to 2.5% compared to the previous week.

The Biden administration is considering increasing tariffs on Chinese-made electric vehicles (EVs) to boost domestic EV production. This would be the second tariff hike since 2018, with the current administration also denying tax breaks for foreign-made EVs.

Additionally, the U.S. Department of Commerce is conducting a survey on the semiconductor supply chain to address national security concerns related to Chinese-sourced chips, as the department plans to grant nearly $40 billion to support making chips in the U.S.

Commodity-wise stocks and prices

Copper

After two weeks of inventory inflow, copper stocks in SHFE warehouses decreased sharply by 16.5% to 28,718 t this week from 34,396 t last week. Meanwhile, copper futures inched up by 1% to RMB 68,714/t ($9,633/t).

Aluminium

In SHFE warehouses, aluminium inventories decreased by 8.8% to 102,112 t from 112,002 t last week. In contrast, futures increased by 2.5% w-o-w to RMB 18,895/t ($2,648/t).

Nickel

Nickel stocks reached 13,300 t from last week's 13,358 t, inching down by 0.4% w-o-w. Similarly, nickel prices were up marginally by 0.1% w-o-w to RMB 131,826/t ($18,480/t) compared to RMB 131,744/t ($18,469/t) last week.

Zinc

Zinc inventories in major SHFE warehouses witnessed a slight hike of 5.5%. The inventory stood at 25,440 t, compared to 24,109 t last week. Likewise, future prices went up by 1.4% w-o-w to RMB 21,000/t ($2,944/t). Zinc inventories saw an inflow for the second consecutive week.

Lead

Lead inventories recorded a fall of 4.6% and stood at 56,657 t against last week's 59,393 t. Meanwhile, lead futures were up by 0.8% w-o-w to RMB 15,669 t ($2,197/t).