Commodity Market Update: China Domestic Metals Rise, Gold Hits New High
Advisory Bazaar Info Services
China’s domestic commodity market witnessed strong gains in base metals and ferrous metals on Monday. Zinc, lithium carbonate and ferrous metals posted notable gains, while precious metals also remained firm. SHFE Gold climbed to a fresh high since May. Meanwhile, LME base metals traded mixed and crude oil prices declined.
Base Metals Rise
At midday trading, SHFE Copper gained 0.44%, Aluminum 0.89%, Lead 0.40%, Zinc 1.19%, and Nickel 0.80%. SHFE Tin, however, declined 0.78%.
Among other commodities, Cast Aluminum rose 0.26%, Alumina 0.56%, and Lithium Carbonate jumped 2.90%. Silicon Metal declined 0.46%, while Polysilicon fell 1.73%.
Strong Gains in Ferrous Metals
All major ferrous metal contracts traded higher. Iron Ore gained 1.77%, Rebar 1.62%, Hot-Rolled Coil 1.67%, and Stainless Steel 0.39%.
Coking Coal advanced 2.93%, while Coke surged 3.87%.
LME Base Metals Trade Mixed
LME base metals showed a mixed trend in international markets. LME Copper declined 0.14%, Aluminum gained 0.06%, Zinc fell 0.24%, and Tin declined 1.04%. LME Nickel was down 0.32%, while Lead remained broadly unchanged.
Gold and Silver Remain Strong
Precious metals continued to gain. COMEX Gold rose 0.46% to $4,713.8 per ounce, reaching its highest level since May. COMEX Silver gained 1.06%.
In the domestic market, SHFE Gold jumped 2.79% to 1,008.78 yuan/gram, also reaching a fresh high since May. SHFE Silver gained 1.31%, Platinum rose 1.37%, and Palladium advanced 0.61%.
Copper: Domestic Spot Premiums Ease
In Guangdong, the premium for high-quality copper over the front-month contract stood at 150 yuan/tonne, down 50 yuan from the previous trading day.
The premium for standard-quality copper was 80 yuan/tonne, while the SX-EW copper premium stood at 10 yuan/tonne.
The average price of Guangdong #1 copper cathode was 107,840 yuan/tonne, while the average SX-EW copper price was 107,735 yuan/tonne.
China Macro Outlook
The PBOC injected 340 billion yuan of net liquidity into the market through 7-day reverse repos.
On August 26, China’s State Council Information Office is scheduled to hold a press conference on the full implementation of the 15th Five-Year Plan and accelerating the development of new industrialization.
The government is also emphasizing talent development in controlled nuclear fusion and promoting “Fusion + AI” innovation.
US Dollar and Fed in Focus
At 11:40 a.m., the US Dollar Index stood at 98.83, up 0.01%. Markets are closely watching upcoming US inflation data and Fed Chair Warsh’s Jackson Hole speech.
According to CME FedWatch, the probability of US interest rates remaining unchanged in September stands at 59%, while the probability of a 25-basis-point rate hike is 41%. Uncertainty over interest rates also remains for October.
Crude Oil Prices Decline
Crude oil prices remained under pressure. WTI crude declined 1.48%, while Brent crude fell 1.35%.
Markets remain cautious amid US-Iran tensions and the possibility of new economic sanctions. Risks surrounding the Strait of Hormuz, along with a notable increase in India’s purchases of Russian crude, are also being closely monitored.
Market Outlook
Overall, China’s domestic metals market maintained a strong bullish tone, with particularly strong gains in Zinc, Lithium Carbonate and ferrous metals. Gold also showed strength by reaching a fresh high since May.
However, mixed trading in LME base metals and weakness in crude oil suggest that caution remains in global commodity markets.