SMM Morning Comment For SHFE Base Metals November 14

SHANGHAI, November 14(SMM) –
Copper
LME copper prices opened at $8119/mt overnight before reaching a low of $8090.6/mt and a high of $8196/mt, and closed at $8187/mt, a rise of 1.9%. Trading volumes were 20,000 lots and open interest stood at 266,000 lots. The most active SHFE 2312 copper contract prices opened at 67390 yuan/mt and finished at 67490 yuan/mt overnight, up 0.76%, with the low-end of 67270 yuan/mt and the high-end of 67500 yuan/mt. Trading volume was 21,000 lots and open interest stood at 144,000 lots. On the macro front, a survey by the New York Fed showed that inflation expectations in one year fell to 3.6% from 3.7% in September, inflation expectations in three years were 3%, the same as in September, and inflation expectations in five years dropped from 2.8% in September to 2.7%. In addition, international oil prices rose to a new high since November 7 as OPEC's monthly report eased market concerns about demand, while a U.S. investigation into shipping companies suspected of violating Russian oil sanctions raised concerns about potential supply disruptions. On the fundamentals, as of November 13, SMM copper inventory across major Chinese markets decreased by 1,800 mt from last Friday to 54,500 mt. Inventories in East China have declined. Due to higher premiums and discounts in East China, refineries and importers are less willing to deliver goods to warehouses, which has led to a decrease in inventories. Inventories in South China have increased slightly, and consumer demand in the downstream of South China has been more active. Due to the large price difference between Shanghai and Guangdong, part of the supply was sent to South China. In terms of consumption, high premiums combined with high price spread between the front-month and next-month contract will dampen demand before the delivery of the SHFE front-month contract. In terms of price, affected by low inventory, copper prices have strong support.
Aluminum
The most-traded SHFE 2312 aluminum contract opened at 18960 yuan/mt overnight, with its low and high at 18890 yuan/mt and 18960 yuan/mt before closing at 18940 yuan/mt, up 60 yuan/mt or 0.32%. LME aluminum opened at $2222.5/mt on Monday, with its low and high at $2203/mt and $2235/mt respectively before closing at $2230/mt, up $9/mt or 0.41%. On the macro level, the hawks and doves within the Federal Reserve are co-existing, adding to overseas macro uncertainty. Domestic favorable policies continue to boost the domestic economy. China’s October social financing data far exceeded expectations, boosting market confidence. Fundamentally, Yunnan's production reduction coincides with the arrival of the off-season, with both supply and demand reduced. Social inventories of aluminum ingots continue to accumulate, suppressing market sentiment. SHFE aluminum may move sideways in the short term.
Lead
LME lead opened at $2177/mt and rose during the Asian trading hours yesterday, rising to $2190/mt during the European trading hours. It finally dropped and closed at $2168.5/mt, down $11.5/mt or 0.53%.
The most-active SHFE 2312 lead contract opened at 16540 yuan/mt last night, hitting the lowest point at 16450 yuan/mt, and closed at 16465 yuan/mt, down 20 yuan/mt, or 0.12%.
Zinc
LME zinc opened at $2601/mt yesterday evening, and hit a high of $2576.5/mt before falling back to $2534.5/mt, and closed at $2550/mt, a decrease of $10.5/mt or 0.41%. The trading volume decreased to 7303 lots, and open interest added 2047 lots to 206,000 lots. LME zinc inventory dropped by 925 mt or 1.32% to 69225 mt. Foreign media reported on November 13 that two sources said that Germany’s Nordenham zinc smelter is expected to restart next year. The smelter has been undergoing maintenance and repairs for more than a year. The smelter will resume zinc concentrate roasting, the first of four processes to produce refined zinc metal, in the first quarter of next year, one of the people said. The smelter produces about 165,000 tons of zinc and zinc alloys each year, and zinc ingots fluctuated downward due to expected growth in zinc ingot supply.
Overnight, the most active SHFE 2312 zinc contract opened at 21,480 yuan/ton and quickly moved up to reach a high of 21,565 yuan/ton. Prices fell to a low of 21,450 yuan/ton and finally closed down at 21,550 yuan/ton, down 15 yuan/ton, or 0.07%. At the end of October, China's social financing stock, M2, RMB deposits, and government bond net financing in October all increased year-on-year.
Tin

SHFE 2312 tin contract rose to 216440 yuan/mt overnight and then fell back, closing at 213569 yuan/mt, down 0.04%.
Yesterday, spot premiums and discounts in domestic spot market for various tin ingot brands changed little. Small brand tin ingots were offered at discounts of 100 and premiums of 500 yuan/mt, versus premiums of 400-700 yuan/mt for delivery brands, premiums of 1000-1100 yuan/mt for Yunxi brand, and discounts of 500-600 yuan/mt imported brand tin ingots. Tin prices rose sharply yesterday, and the purchasing sentiment of downstream companies was relatively sluggish. Most of them took a wait-and-see attitude. The trading market transactions were relatively bleak. Some trading companies traded around 10 mt, and some trading companies shipped scattered goods. However, the spot market transactions picked up yesterday afternoon.
Nickel
Overnight, the most-traded SHFE nickel contract opened at 139110 yuan/mt, and closed at 139660 yuan/mt, down 630 yuan/mt. Trading volume rose 76540 lots, and open interest increased by 4879 lots. On the macro front, the Chairman of the Federal Reserve continued to be hawkish in his speech, but this did not affect the market's expectation that interest rates will remain unchanged in December. From a fundamentals perspective, the trend of pure nickel inventory accumulation remains unchanged, and downstream demand has not yet improved. Yesterday’s spot market transactions were still weak. Nickel price is expected to be move rangebound.