China Metals Rise Overnight Amid LME Declines and Geopolitical Tensions

The Shanghai Metals Market reported that metal markets in China saw an overall increase overnight. SHFE copper rose by 0.1%, while SHFE aluminum gained 0.38%. SHFE lead edged up 0.1% and SHFE zinc increased by 1.11%. However, SHFE nickel dropped 1.22%, and SHFE tin fell 0.98%. In the ferrous metal market, stainless steel rose slightly, iron ore gained 0.35%, and rebar increased 0.17%. Hot-rolled coil (HRC) surged 0.59%. Coking coal and coke also saw gains, with the most-traded coking coal futures contract rising 1.54% and the most-traded coke contract gaining 2.48%.

On the LME, base metals mostly declined overnight. LME copper rose to an intraday high of $14,369.5/mt before closing with a 0.4% decline. LME aluminum gained 0.65%, while LME zinc increased by 0.64%. However, LME tin dropped 1.43% and LME nickel fell 2.45%.

The US dollar index rose 0.26% to 99.95 overnight, with escalating geopolitical tensions weighing on both US stocks and bonds. Oil prices jumped, reigniting inflation concerns ahead of the key US employment report. The CME 'FedWatch' tool showed that the probability of the US Fed keeping rates unchanged by September is 45%, while the probability of a cumulative 25 basis point hike is 55%.

China's macroeconomic news included announcements from the Guangdong Department of Commerce and the China Association of Automobile Manufacturers (CAAM). The '15th Five-Year Plan for the Development of the China (Guangdong) Pilot Free Trade Zone' aims to expand financial opening-up in an orderly manner. CAAM reported that June auto commodity imports and exports reached $31.82 billion, up 35.5% YoY.