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[SMM Daily Review] most of the non-ferrous metals closed higher in Shanghai, copper, Shanghai and aluminum hit a new high, supply and demand weakening, black series decline continued.
Jul 1,2020 16:27CST
translation
Source:SMM
On Wednesday, most of the non-ferrous metals extended the rally, with copper and aluminum rising more than 1.6%, lead and tin rising slightly, and zinc and nickel falling more than 0.7%.
The content below was translated by Tencent automatically for reference.

SMM7 March 1: on Wednesday, most of the non-ferrous metals extended their gains, with Shanghai Copper and Shanghai Aluminum rising more than 1.6%, Shanghai lead and Tin rising slightly, and Zinc and Nickel falling more than 0.7%. China's Caixin manufacturing PMI released today was 51.2, the highest so far this year, and the trend is in line with the manufacturing PMI of the National Bureau of Statistics. The data show that the production activities of domestic enterprises have basically resumed. The main force of Shanghai Aluminum closed up for 3 days in a row and continued to be strong today. Aluminum fundamentals continue to be strong to the Treasury, coupled with short-term consumption can still form support for Shanghai Aluminum; capital speculation is also one of the reasons. In addition, the gap between warehouse receipt inventory and inventory required for delivery is too large, there is a long squeeze in the market is expected to also pull up aluminum prices. Shanghai Nickel has weakened in recent days, with the global nickel market supply surplus narrowing to 8800 tons in April, according to data released by (INSG), an international nickel industry research group. There is a weakening trend in the fundamentals of the nickel market recently, mainly due to the recent rebound in the port nickel mine and the expected month-on-month decline in stainless steel production in July, and nickel prices are expected to maintain a volatile market in the short term.

Black iron ore fell 0.27%, thread fell 0.06%, hot coil fell 0.45%. SMM tracking data show that 6.21 Mel 6.27 arrivals decreased by 370000 tons compared with the previous period, an increase of 3.87 million tons over the same period last year. During this period, Australia and Brazil outbound continued to pick up. Considering the high level of iron ore shipments in the early stage and the recent easing of port pressure, iron ore port stocks are expected to continue to accumulate in July. According to SMM research, as of June 30, the operating rate of 34 independent electric arc furnace steel mills was 77.73%, down 4.24% from the same period last week. Under the influence of poor profits and high pressure on the plant warehouse, the operating rate of the electric furnace steel plant has declined for two consecutive weeks.

Crude oil rose 0.45% in the previous period. International oil prices rose more than 1 per cent on Wednesday after data showed that US crude oil stocks fell much more than expected, suggesting that demand has improved despite the global spread of new crown pneumonia. September Brent crude futures rose 39 cents, or 1%, to $41.66 a barrel. Us crude oil futures for august rose 44 cents, or 1.1%, to $39.71 a barrel.

As of today's day close:

Today's capital flow

Today, the Mandarin Commodity Index flooded into more than 1.7 billion yuan, and precious metals became the biggest winner, with inflows of 1.69 billion yuan. Among them, Shanghai silver rose sharply, attracting more than 1 billion capital inflows, ranking first in commodities, and Shanghai gold also attracted nearly 600 million yuan. Non-ferrous and feed sectors are also favored by funds, of which soybean meal and Shanghai copper rank second and fifth on the list of commodity inflows. The crude oil sector became the sector with the largest capital outflow, with the crude oil index losing more than 900 million yuan, far surpassing other commodities and ranking first in commodities, while hot asphalt attracted nearly 600 million yuan.

A brief comment on SMM analysts on July 1st

Copper: today, the main force of Shanghai copper opened high at 48940 yuan / ton in the morning. After opening, the bulls gradually increased their positions and pulled the copper price up rapidly to 49280 yuan / ton. At this time, the long and short forces were deadlocked, and after the copper price was slightly sorted out around 49210 yuan / position, the copper price fluctuated upward again until it closed at 49320 yuan / ton before noon. After opening in the afternoon, the bulls reduced their positions, and the market quickly fell to 49170 yuan / ton. At this time, the price of copper in Kongping continued to rise, exploring a daily high of 49380 yuan / ton, and finally closed at 49350 yuan / ton, up 790 yuan / ton, or 1.63%. Today, the main contract of Shanghai Copper increased its positions by 4888 to 129000, mainly by long positions; the trading volume increased by 46000 to 152000; and the Shanghai Copper 07 contract reduced its positions by 6189 to 52000, mainly by short positions. Trading volume fell by 12000 to 29,000. 09 contract increased significantly, up to 5234 in a day. During the day, the main force of copper in Shanghai continued to rise, mainly due to continued loosening of economic policy. Today, the people's Bank of China once again cut the re-lending and rediscount interest rates. After the cut of 0.25 percentage points, the interest rates of three-month, six-month and one-year agricultural re-loans and small loans were 1.95%, 2.15% and 2.25% respectively, and the rediscount rate was reduced by 0.25 percentage points to 2%. Major good news for the real economy and capital markets effectively boosted market confidence and pushed copper prices up sharply. In addition, the Caixin PMI announced today recorded 51.2, an increase of 0.5% over the previous month and the highest since December 2019. The manufacturing PMI index has been in the expansion range for two months in a row, reflecting that China's economic recovery growth has formed a good trend, and the manufacturing sector is obviously on the rise. Investor sentiment continues to be optimistic, supporting the upward trend in copper prices. At present, the price of copper in Shanghai has closed, the price of copper has jumped away from the lower moving average, and the KDJ opening continues to expand. From a technical point of view, it is good for the price of copper. In the evening, wait for the outer disk guidelines to test whether Shanghai Copper can break through the 49500 yuan / ton mark.

 

 

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