Copper

LME copper prices opened at $8388/mt and closed at $8394/mt in overnight trading, a gain of 0.02%, with the low-end of $8351/mt and the high-end of $8443/mt. Trading volume was 14,000 lots, and open interest stood at 282,000 lots. The most active SHFE 2310 copper contract prices opened at 69160 yuan/mt and closed at 69100 yuan/mt last evening, down 0.01%, with the high-end of 69360 yuan/mt and the low-end of 69050 yuan/mt. Trading volumes stood at 23,000 lots and open interest stood at 155,000 lots. On the macro front, the U.S. annualised CPI before seasonal adjustment recorded 3.7% in August, a new high since May this year and rebounded for the second consecutive time; the U.S. annualised core CPI annual rate before seasonal adjustment in August recorded 4.3%, a new low since September 2021, and falling for six consecutive months. The mixed inflation report reinforced expectations that the Federal Reserve will pause on raising interest rates, but it does not mean the end of the tightening cycle. In terms of fundamentals, the overall transactions in East China were still quiet yesterday, mainly due to the low downstream purchasing; the inventory in South China ended five consecutive days of declines, mainly due to the low shipments from warehouses and the nearing delivery. Spot quotes in South China shifted downward yesterday. In terms of consumption, copper prices are fluctuating at high levels, and processing companies are on the sidelines. Demand will be difficult to improve before delivery. Affected by the mixed US inflation data, copper prices are expected to remain within a narrow range in the near future.

Aluminum

Overnight, the most-traded SHFE 2310 aluminum contract opened at 19,175 yuan/mt, with its lowest and highest at 19,110 yuan/mt and 19,195 yuan/mt before closing at 19,110 yuan/mt, flat with the previous trading day. LME aluminum opened at $2,199/mt on Wednesday, with its high and low at $2,220/mt and $2,191/mt respectively before closing at $2,211/mt, an increase of $14.5/mt or 0.66%.

There are expectations for hawkish stance of the US Fed. In the near future, we need to pay close attention to the multiple impacts of interest rate hike expectations in Europe and the US and exchange rate fluctuations on the non-ferrous metals market. Aluminum supply increased, with domestic social inventory of aluminum ingots rising above the 500,000 mt mark, and the inventory pressure in September may mount. At the same time, the supply of imported goods in the market has increased recently, and we need to be alert to the impact of imported low-priced supplies on the domestic aluminum spot market. Low inventory will support aluminum price, while supply pressure will cap gains. It remains uncertain how strong demand will be in September since the demand in peak season didn’t reach expectations. SMM expects short-term aluminum prices to remain volatile at a high level and will pay attention to domestic aluminum inventories and downstream consumption in the future.

Lead

LME lead prices opened at $2223/mt and closed at $2212.5/mt last evening, down 0.45%.

The most active SHFE 2310 lead contract prices opened at 16880 yuan/mt last evening, and closed at 16875 yuan/mt, a gain of 0.03%, with the high-end of 16920 yuan/mt and the low-end of 16835 yuan/mt.

Zinc

Overnight, LME zinc prices opened at $2483.5/mt, and closed at $2528/mt, up $46/mt or 1.85%. Trading volume decreased to 7187 lots, and open interest grew 2634 lots to 211,000 lots. Overnight LME inventories fell by 6,200 tons to 132,200 tons, a decrease of 4.48%. LME inventories continued to decline significantly, and with news of production cuts at overseas mines, global mines faced a supply shortage, which provided support for zinc prices.

The most active SHFE 2310 zinc contract prices opened at 21600 yuan/mt and closed at 21765 yuan/mt last evening, up 135 yuan/mt or 0.62%. The trading volume was down to 66174 lots, and open interest increased 1810 lots and stood at 109,000 lots.

Tin

SHFE 2310 tin contract rose slightly after the opening last night, reached a highest of around 217,430 yuan/mt, and then turned to fluctuate in a sideways range. It finally closed at 216,910 yuan/mt, up 0.86%. Spot premiums and discounts barely changed yesterday. Small brand tin ingots were offered at premiums of 300 yuan/mt, premiums of 300-500 yuan/mt for delivery brands, premiums of 1,000-1,500 yuan/mt for Yunxi brand, and discounts of 700-800 yuan/mt for imported brand tin ingots slated to arrive in China next week. Lower tin price and upcoming holidays drove downstream to stock up.

Nickel

Overnight, the most-traded SHFE nickel contract opened at 162,990 yuan/mt, and closed at 161,600 yuan/mt, down 4,280 yuan/mt. Trading volume dropped by 41,924 lots, and open interest decreased by 1,046 lots. On the macro front, we still need to pay attention to the US August CPI data to be released on night. The current market expectation is 3.6%, which is higher than the previous value of 3.2%, reflecting that the market is now expecting the Federal Reserve to raise interest rates and thus putting pressure on nickel prices. Looking at the spot market, yesterday's nickel prices plunged in the afternoon. With the National Day holiday approaching, some downstream buyers have begun to stock up. Nickel price is expected to be volatile.