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[SMM point of view] the short rise of the US dollar forces Nonferrous to fall back temporarily and the rally in Shanghai and tin slows down a little. Is there still a chance for follow-up?
Jul 28,2020 13:19CST
translation
Source:SMM
The content below was translated by Tencent automatically for reference.

SMM7 March 28: the metal market strengthened across the board this morning, with Shanghai Tin rising more than 6% at one point, and the futures price reached its highest level since November 2018, but then gradually spit out the rise. by the close of lunchtime, the main contract of Shanghai tin 2009 was at 147940 yuan / ton, an increase narrowed to 2.22%. Tin prices have continued to rise since the beginning of this week, rising more than 3 per cent yesterday (Monday).

On the dollar side, due to market concerns about soaring new cases in the United States and the Federal Reserve meeting this week, the dollar is expected to renew its commitment to keep interest rates low, keeping the dollar weak. As of Monday (July 27), the dollar index hit 93.47, its lowest level since June 2018. Analysts say the Fed is expected to reiterate at the end of its two-day policy meeting on Wednesday that interest rates will remain near zero for years to come. Investors will be watching to see whether the Fed will hint that it will buy more longer-term bonds and whether it will impose yield curve controls in the future.

The continued weakness of the US dollar has provided a strong boost to non-ferrous metals since the beginning of the week. As of 09:30 this morning, all domestic non-ferrous metals were red, with Shanghai tin up nearly 4.6%, Shanghai lead up nearly 2.4%, Shanghai nickel up nearly 2.3%, Shanghai zinc up nearly 2.1%, Shanghai aluminum up nearly 1.2%, and Shanghai copper up nearly 0.9%. However, near 10:30, the short rise of the US dollar led to a decline across the board of non-ferrous metals, highlighting some of the morning gains, and Shanghai tin also fell back from a rise of 6 per cent to around 2 per cent.

Summary of institutional views:

Shi Jialiang: medium-term futures Shi Jialiang: the US dollar continues to weaken, driving the overall strength of the non-ferrous metal plate; tin is a small variety, which is more easily affected by mood and capital. The upsurge of emotion leads to the change of funds, and Shanghai tin opens to above 150000. But this market is divorced from fundamentals. As long positions have made profits and the dollar has pulled up precious metal diving, the non-ferrous plate has also followed the dive, and Shanghai tin has narrowed its gains.

Recently, there is no obvious change in the fundamentals of supply and demand in Xi City, and it is still in a pattern of weak supply and demand. the price rise caused by supply correction has ended, and there is still some uncertainty in the fundamentals of supply and demand in the domestic market. Recent trade disputes and geopolitics show signs of rising, the macro market environment is empty, and the market does not have strong support to continue to rise.

The market sentiment and capital changes caused by the macro aspect and the trend of the US dollar have become the core factors affecting the current trend of Shanghai and tin, while trade disputes and the upgrading of geopolitics will impact the electronic industry chain. Of course, the weakness of the US dollar will also support Shanghai and tin. Therefore, in the near future, Shanghai and tin fluctuate in the forecast range, which is suitable for high selling and low suction operation in the range of 140000-150000. If trade disputes and geopolitics escalate further, the trend of tin prices falling again cannot be ruled out. Therefore, for Shanghai tin, it is not recommended to catch up, it is recommended to wait and see for the time being.

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