SMM Evening Comments (Mar 8): Shanghai Nonferrous Metals Closed with Losses on Enhanced Market Expectations for Rate Hikes

SHANGHAI, Mar 8 (SMM) - Shanghai nonferrous metals closed with losses in day trading. On the macro front, Fed Chairman Powell’s hawkish speech triggered panic in the market. With the possibility of Fed's 50bp rate hike in March raised to 70.5%, the US dollar once again hit 105.5.

SHFE copper dipped 0.98 %, aluminium slid 0.54%, lead edged down 0.49%, zinc declined 0.70%, tin shed 1.19%, and nickel lost 1.41%.

Copper: The most-traded SHFE 2304 copper closed down 0.98 % or 680 yuan/mt at 68,880 yuan/mt, with open interest down 1,710 lots to 145,772 lots.

In the spot market, the spot trades were brisk as downstream buyers were passionate about purchasing when copper prices fell below 69,000 yuan/mt. The spot premiums also enjoyed great momentum.

Aluminium: The most-traded SHFE 2304 aluminium closed down 0.54% or 100 yuan/mt at 18,540 yuan/mt, with open interest down 2,267 lots to 187,861 lots.

After aluminium smelters in Yunnan have completed production cuts, the market attention will focus more on the recovery of domestic consumption. Downstream operating rates and orders improved month-on-month, and the market is gradually entering peak season. However, inventory of aluminium ingots remained high.

Lead: The most-traded SHFE 2304 lead closed down 0.49% or 75 yuan/mt at 15,195 yuan/mt, with open interest up 2,268 lots to 63,485 lots.

SHFE lead inched lower today, and the cargo holders held firm to their prices. The secondary lead smelters were not passionate about selling amid low prices, leading to limited supplies in the spot market. Downstream enterprises mainly purchased as needed, with a few still standing on sidelines based on bearish sentiment. The spot trades improved slightly. 

Zinc: The most-traded SHFE 2304 zinc closed down 0.70% or 165 yuan/mt at 23,260 yuan/mt, with open interest down 1,463 lots to 82,392 lots.

As zinc prices dropped today, the downstream buyers were motivated to purchase on dips, but the trades were still generally made on rigid demand. The transactions improved from the previous trading day.

Tin: The most-traded SHFE 2304 tin closed down 1.19% or 2,380 yuan/mt at 197,140 yuan/mt, with open interest up 3,225 lots to 66,735 lots.

In the spot market, the quotes of smelters increased will falling futures prices. The transactions rose slightly, and the spot premiums/discounts were basically flat.

Nickel: The most-traded SHFE 2304 nickel closed down 1.41% or 2,670 yuan/mt at 186,830 yuan/mt, with open interest up 5,452 lots to 79,923 lots.

In the spot market, Jinchuan nickel was quoted in premiums of 7,000-8,500 yuan/mt, with an average of 7,750 yuan/mt, down 600 yuan/mt on a daily basis. NORNICKEL nickel was in premiums of 3,300-3,600 yuan/mt, with an average of 3,450 yuan/mt, down 200 yuan/mt. SHFE nickel still weakened, but spot transactions remained slack with falling premiums. For nickel briquette, the prices stood between 190,600-191,600 yuan/mt, down 2,800 yuan/mt from the previous trading day. 

[Disclaimer: The above representation and data is based on market information SMM believes to be reliable at the time of acquiring as well as the comprehensive assessment by SMM research team, and any and all information provided in this article is for reference only. This article does not constitute a direct recommendation for investment or any decisions in any form and clients shall act on their own discreet and any decisions made by clients are not within the responsibility of SMM.]