SMM Evening Comments

Category:-Metal | 17-Mar-2023 05:37 PM

Shanghai nonferrous metals closed with gains in day trading. On the macro front, the market was shocked to learn that ECB insisted on a 50-basis-poin rate hike to tackle inflation. The attention was focused on the FOMC meeting the coming week. The gold prices climbed for two straight days as the market players resorted to risk aversion.   

SHFE copper added 0.19%, aluminium gained 0.52%, lead rose 0.95%, zinc edged up 0.65%, tin ticked up 0.88%, and nickel increased 0.44%.

Copper: The most-traded SHFE 2304 copper closed up 0.19% or 130 yuan/mt at 67,220 yuan/mt, with open interest down 16,852 lots to 115,381 lots.

In the spot market, the spot premiums first rose and then fell, and the trading was less active compared with the day before. The mainstream transaction prices inched down as some traders were eager to promote sales and lowered the quotes. With rising SHFE/LME copper price ratio rising and the opened import window that ensues, the imported copper is bound to flow into the domestic spot market.

Aluminium: The most-traded SHFE 2304 aluminium closed up 0.52% or 95 yuan/mt at 18,230 yuan/mt, with open interest down 16,215 lots to 160,501 lots.

In terms of fundamentals, the operating rate of downstream enterprises rose, contributing to growing transactions in the spot aluminium market and a decline in the social inventory of aluminium ingots. However, the bearish macro sentiment will weigh on overseas consumption, and it is expected that the aluminium prices will face downside pressure, though the decline may be limited.  

Lead: The most-traded SHFE 2304 lead closed up 0.95% or 145 yuan/mt at 15,405 yuan/mt, with open interest down 7,713 lots to 43,556 lots.

SHFE lead strengthened, and goods holders were active to make shipment. However, the limited supply in the market resulted in few quotes, and rising lead prices caused downstream enterprises to mainly stand on the sidelines after they restocked early this week. Both inquiries and trades were lacklustre in the spot market.

Zinc: The most-traded SHFE 2304 zinc closed up 0.65% or 145 yuan/mt at 22,520 yuan/mt, with open interest down 7,248 lots to 74,493 lots.

Zinc prices climbed today, and the premiums also expanded because the supply available in the market was insufficient due to brisk transactions yesterday. Therefore, the trading in the market today was quiet.

Tin: The most-traded SHFE 2304 tin closed up 0.88% or 1,600 yuan/mt at 183,520 yuan/mt, with open interest down 6,887 lots to 60,351 lots.

Tin futures prices picked up, encouraging more smelters to offer quotes in the morning session. However, the inquiries fell, and the spot transactions were slack.  

Nickel: The most-traded SHFE 2304 nickel closed up 0.44% or 770 yuan/mt at 175,960 yuan/mt, with open interest down 6,066 lots to 62,981 lots.

In the spot market, Jinchuan nickel was quoted in premiums of 7,500-7,800 yuan/mt, with an average of 7,650 yuan/mt, up 200 yuan/mt from the previous trading day. NORNICKEL nickel was in premiums of 2,600-2,700 yuan/mt, with an average of 2,650 yuan/mt, flat from yesterday. The spot transactions were thin when upstream suppliers were not interested in selling amid low nickel prices and sluggish demand. For nickel briquette, the prices stood between 178,500-179,300 yuan/mt, up 3,500 yuan/mt from the previous trading day. 

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