Posted on 25 Dec 2023
Encouraged by falling inventories and some improved macro-economic factors, copper and aluminum derivatives on the Shanghai Futures Exchange (SHFE) both gained ground during the week of December 18-22, Mysteel Global notes.
As of Friday, the SHFE's most-traded futures contracts for copper and aluminum – both for next February delivery – had risen by Yuan 520/tonne ($72.8/t) and Yuan 565/t respectively on week to close the daytime session at Yuan 69,040/t and Yuan 19,165/t, according to the exchange's data.
Overseas, weaker-than-expected economic data strengthened market expectations in China that the US could consider cutting interest rates as early as next year. The dollar index fell in tandem, which gave a lift to China's nonferrous market, according to market sources.
Domestically, sentiment in the country's nonferrous metals sector was also encouraged by stimulus policies such as the fact that China's central bank is proposing to increase counter-cyclical and inter-cyclical adjustments to guide reasonable credit growth.
Falling stocks of copper and aluminum also supported their prices during the week, sources added.
By Friday, inventories of copper and aluminum in the SHFE's registered bonded and normal warehouses had both declined on week, with the former lower by 5,678 tonnes on week at 28,718 tonnes and the latterby 9,890 tonnes on week at 102,112 tonnes.
On the same day, nickel inventories also inched down by 58 tonnes on week to 13,300 tonnes. Nevertheless, nickel prices were still dragged down by weak demand for the base metal, with the most-traded nickel contract for next January delivery plunging by Yuan 2,010/t from the previous Friday's settlement price to close at Yuan 130,740/t on Friday, SHFE data showed.
Source:Mysteel Global
