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[SMM comment] the metal market is generally down. The last period of crude oil and precious metals continue to go crazy. Shanghai silver rose more than 7%.
Jul 23,2020 09:37CST
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Source:SMM
The content below was translated by Tencent automatically for reference.

SMM7 March 23: the LME metal market has its ups and downs in the morning trading. As of 09:30, Lun Zinc rose nearly 0.4%, Lun Nickel rose nearly 0.3%, Lun Copper rose slightly, Lun Xi was flat, Lun Aluminum fell slightly. On the domestic side, most of the metal market fell, Shanghai Nickel fell nearly 2%, Shanghai lead and Shanghai Tin fell nearly 1.4%, Shanghai Zinc fell nearly 1.2%, Shanghai Copper fell nearly 1.1%, and Shanghai Aluminum rose nearly 0.5%.

As far as aluminum is concerned, according to SMM, there is a trend of production reduction or suspension of production among aluminum rod manufacturers in the northern region recently. Due to the implementation of production restrictions on environmental protection in Jiaozuo, Henan Province, local aluminum rod factories are all in a state of suspension of production, and normal production and operation activities are restricted. Some aluminum rod enterprises in Luoyang area have stopped production due to poor market demand. Several aluminum rod production plants in Inner Mongolia have or are considering implementing production reduction plans, and individual aluminum rod manufacturers in Shandong are more inclined to produce high-end customized aluminum rods with high processing fees. The output of common aluminum rod decreases again and again. On the whole, the supply end of aluminum rod in the north is weaker.

[SMM Analysis] production reduction, superimposed suspension of production, supply and demand of aluminum rod market in northern China are worrying.

In terms of zinc, consumer end, galvanizing, due to the squeeze of galvanized tube enterprises' profits, and even production losses in some areas, only some enterprises are able to retain profits because of their large reserves in the early stage, and the overall production is lower than before. As for galvanized structural parts, orders show signs of warming up, superimposed Hebei enterprise scaffolding is still a strong support, terminal projects in some areas will start in early August. Galvanized sheet, home appliance demand with strong toughness superimposed export orders have improved. Die-casting zinc alloy plate, the current terminal overseas order improvement is not obvious, China has entered the off-season of traditional consumption, the overall demand has shrunk. Zinc oxide plate, domestic demand remains stable, tire sector performance is still good, enterprise feedback orders do not show signs of decline, while chemical orders are still in peak season, order performance is also good, while feed orders performance is slightly worse. On the whole, the downstream consumption of zinc in the future is worth looking forward to.

[SMM analysis] the macro-emotional impact of Shanghai Zinc's return to Wan Ba is significant.

In terms of black series, the thread is flat, hot coil is down nearly 0.1%, stainless steel is down nearly 1.7%, coke is up nearly 0.2%, coking coal is down nearly 0.2%, iron ore is down nearly 0.3%, thread inventory in Hangzhou this week is 1.078 million tons, month-on-month compared to-7000 tons, year-on-year + 377000 tons. Recently, the high level shock of thread inventory in Hangzhou has not been accumulated continuously. the main reason is that Jiangsu, Anhui and other places are seriously affected by floods, shipping and automobile transportation are limited to a certain extent, and the shipments of local resources to Hangzhou have decreased. Secondly, Hangzhou inventory is close to the peak storage capacity, superimposed by the impact of the rainy season, port ships are inconvenient to unload, due to inventory pressure, some steel mills, such as Yonggang, have reduced shipments to Hangzhou. Finally, the plum gradually emerged from Hangzhou and its surrounding areas this week, and market traders said that terminal demand showed obvious signs of recovery, although it had not yet reached the level of prosperity, but it had made a certain contribution to the elimination of inventory in Hangzhou.

"[SMM thread] what is the impact of the spot market if Hangzhou warehouse wants to charge more for storage?

Crude oil fell nearly 0.8% in the previous period, with the falling dollar and strong u.s. stocks supporting the market hit by weak demand. However, US government data showed that crude oil inventories rose by nearly 5 million barrels last week, refined oil depots rose to their highest level in decades, and gasoline demand was sluggish, suggesting that the coronavirus keeps drivers off the road during the summer peak fuel season.

In terms of precious metals, Shanghai gold rose nearly 0.8%, and Shanghai silver rose nearly 7.4%. With a surge in virus cases, slowing economic growth, negative real interest rates in the United States, rising international political tensions and a weaker dollar, demand for safe haven assets soared. Investors are flocking to precious metals.

As of 09:30, the status of contracts in the metals and crude oil markets:

Brief comments on SMM:

Copper: last night, Lun Copper closed at 6477 US dollars / ton, down 1.31%. The trading volume was 48000 lots, and the long positions were reduced by 621 to 316000 lots. The Shanghai Copper 2009 contract closed at 51980 yuan / ton, down 0.82%. The trading volume was 104000 lots, and the long positions were reduced by 926 lots to 119000 lots. A spokesman for the Chinese Foreign Ministry confirmed yesterday that the US side suddenly asked China to close the consulate in Houston and urged the US side to withdraw the unreasonable decision immediately, otherwise it would reserve the right to counteract. After the news, the market rekindled worries about the tension in Sino-US relations. Lun Copper fell sharply by US $80 / ton in the short term, and assets such as A50 share index futures and European stock markets fell significantly at the same time, followed by a low shock, which fell as low as US $6415.5 / ton in intraday trading. Affected by this negative effect, Shanghai copper opened low at 52100 yuan / ton at night and continued to fall rapidly in the short term after the opening, until the market mood eased at the end of the day, and copper prices rebounded slightly inside and outside the market. On the spot side, the willingness to receive goods downstream is expected to improve after the decline of the market, and it is still in the period of long order delivery, and it is expected that Shengshui will go higher today. It is estimated that today Lun Copper 6470 won 6520 US dollars / ton, Shanghai Copper 51700 won 52000 yuan / ton. It is expected that the spot water will rise to 120 yuan per ton today.

Aluminum: yesterday Shanghai aluminum main contract opened at 14400 yuan / ton in the morning, opened at 14435 yuan / ton, then fell back to a low of 14350 yuan / ton, and then reduced positions rebounded near 14450 yuan / ton; afternoon fluctuations in a narrow range of 14400 Mustang 14450 yuan / ton range, closed slightly at 14390 yuan / ton, trading volume reduced to 79000 hands, position reduced to 113000 hands, daily close of small crosses. The total position in Shanghai Aluminum Futures decreased to 387000 lots, and the trading volume increased to 206000 lots. Last night, the main share of Shanghai Aluminum opened low at 14305 yuan / ton, fell to 14260 yuan / ton at the opening low, then fluctuated at 14300 yuan / ton, began to climb after 23:00, and closed at 14385 yuan / ton at the end of the day. The accumulation rate of inventory is slow, the spot is still rising, and the domestic demand has performed well under the policy stimulus. It is estimated that the main operating range of Shanghai Aluminum today is 14200 RMB14600 / ton.

Lead: overnight, Shanghai lead opened at 14945 yuan / ton. At the beginning of trading, Shanghai lead fell rapidly, reaching a low of 14765 yuan / ton, and then basically fluctuated along the 20-day moving average, finally trading at 14830 yuan / ton, down 1.49 percent. Shanghai lead pulls back to near the 20-day moving average, showing a trend of turning short, focusing on the impact of macro-Sino-US trade disputes.

Zinc: overnight, the main 2009 contract of Shanghai Zinc opened at 17930 yuan / ton. at the beginning of the session, with the market risk aversion rising, short sellers entered and suppressed, Lun Zinc dived downwards. after touching 17575 yuan / ton, the short sellers stopped their earnings and left the market, and Shanghai zinc revised upwards. after a short period of finishing at 17725 yuan / ton, the center of gravity moved up to 17900 yuan / ton, the center of gravity moved up to 17900 yuan / ton, fell slightly after touching a high of 17990 yuan / ton, and finally closed down 17920 yuan / ton, down 190 yuan / ton, or 1.05%. Trading volume increased to 107311 lots, and position increased by 1928 lots to 91013 lots. Overnight, Shanghai zinc recorded Xiaoyin line with a long shadow line, which broke through the support of the 5 / 10-day line, and the positive column of MACD index narrowed. Due to the downward drag of the outer disk, Shanghai zinc stopped Yang and turned negative, escalating tensions between China and the United States heightened market risk aversion, Shanghai zinc regained its downward trend, but downstream demand recovery expectations are expected to limit downside space. Pay attention to China's geopolitical tensions in the short term. The contract price of Shanghai Zinc 2009 is expected to operate in the range of 17,500mur18000 yuan / ton, and it is expected that domestic Shuangyan zinc will increase the water price by 90mur100 yuan / ton in August contract.

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Nickel: after the close of trading in Shanghai Nickel yesterday, the news of tension in Sino-US relations came out, and the market risk aversion mood heightened. The overnight Shanghai Nickel 2010 contract opened low at 105900 yuan / ton, and the short positions increased sharply. Shanghai Nickel continued the downward trend of opening, exploring a 60-day moving average of 104830 yuan / ton, and was supported to rebound to 105500 yuan / ton. The pressure fluctuated within a narrow range until the close of 105350 yuan / ton, which was down 1290 yuan / ton compared with the settlement price of the previous trading day. The trading volume fell 1.21% to 370000 lots, while the position increased by 12000 lots to 136000 lots. Overnight, Shanghai Nickel closed in the long lower shadow line Xiaoyin column, and the shadow line explored the 60-day moving average. Today, we still need to pay attention to the impact of changes in the situation between China and the United States on market psychology, and pay attention to the support of the 60-day moving average below Shanghai Nickel.

Tin: Shanghai tin trend: the main 2009 contract of Shanghai tin opened at 142790 yuan / ton last night, the highest was 142920 yuan / ton, and the lowest was 141000 yuan / ton. It closed at 141230 yuan / ton, down 1560 yuan / ton, or 1.09%. 18664 hands were traded and 25247 positions were held, a decrease of 1491 hands. Yesterday, the main 2009 contract of tin in Shanghai opened at 142790 yuan / ton. after the opening, affected by the contradiction between China and the United States and pessimistic expectations of foreign trade, the bulls fled the market, and tin quickly jumped to the vicinity of 141900 yuan / ton, followed by horizontal market concussion. the center of gravity moved slightly downward, closing at 141230 yuan / ton, showing a negative line, the entity broke through the 5-day and 10-day moving average, and the lower support level is expected to be near the 20-day moving average of 140500 yuan / ton.

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