"Rally in the industrial metals space refuses to cease and the latest bout came from hike in Steel trading prices on the Shanghai Shanghai Futures Exchange. Last week, the China Iron and Steel Association blamed the unprecedented surge in rebar steel futures to speculative trading, prompting the Shanghai Futures Exchange to take action against the same. In response, China's major commodity derivatives markets said on Friday that it would limit intraday positions for non-member firms and clients on rebar futures contracts for delivery in October 2017 and January 2018 to 8,000 lots from Aug. 15.
As a result of the same, money was diverted from Steel to related metals amidst hopes of strong construction growth in the mainland nation. This pushed zinc to $3037/t the highest levels since 2007 on the LME. Nickel too rallied by more than 3 percent on the LME to touch highs of $10645/t levels.
Aluminium too, had its reasons to rejoice as world's biggest Aluminium supplier Hongqiao clarified that it has shut down 2.68 million tonnes of production capacity, representing 29 percent of the group's total aluminium product capacity as on 15th Aug'17, more than 2 million tonnes it had earlier promised.
Lead prices already got a boost from concerns of tightness in the physical lead concentrate market in China, after the mainland nation implemented the UN order on North Korea on 14th Aug'17. U.N. Security Council unanimously passed a resolution on Aug. 6 banning North Korea's exports of coal, iron, iron ore, lead, lead ore and seafood, in a bid to hurt a third of Pyongyang's $3 billion in annual export revenue. The spill over effect of the same could be seen in the entire nonferrous metals spectrum on both LME and MCX."