SMM Evening Comments (Mar 18): Nonferrous metals on the SHFE fell broadly, zinc shed 0.88%

SHANGHAI, Mar 18 (SMM) – SHFE nonferrous metals fell for the most part on Thursday. Aluminium shed 0.82%, zinc weakened 0.88%, nickel slid 0.35% and lead slipped 0.81%, while copper added 0.5% and tin rose 0.75%.

SMM data showed that stocks of 6063 aluminium billet across the five major consumption areas – Foshan, Wuxi, Huzhou, Changzhou and Nanchang – in China dropped 3,900 mt from the previous week to 232,900 mt as of March 18.

Social inventories of primary aluminium across eight consumption areas in China, including SHFE warrants, expanded 22,000 mt from the prior week to 1.25 million mt as of March 18. Stocks in Nanhai and Wuxi grew slower this week, while stocks in Gongyi declined.

Copper: The most-traded SHFE 2105 copper contract added 0.5% to finish the day at 66,920 yuan/mt, with open interest losing 460 lots to 149,000 lots.

The Federal Reserve on Wednesday sharply ramped up its expectations for economic growth but indicated that there are no interest rate hikes likely through 2023 despite an improving outlook and a turn this year to higher inflation.

As widely expected, the policymaking Federal Open Market Committee also voted to keep short-term borrowing rates steady near zero, while continuing an asset purchase program in which the central bank buys at least $120 billion of bonds a month.

The key changes came in how central bankers view the economic road ahead and what impact that could have on policy.

Aluminium: The most-active SHFE 2105 aluminium contract fell 0.82% to end the day at 17,475 yuan/mt, with open interest losing 4,148 lots to 255,000 lots.

Zinc: The most-liquid SHFE 2104 zinc contract shed 0.88% to close the day at 21,440 yuan/mt, with open interest decreasing 2,423 lots to 59,459 lots. Zinc social inventories increased as high prices depressed demand. Zinc concentrate mines and refined zinc smelters in Inner Mongolia reduced output in March due to local energy consumption control policies.

Nickel: The most-traded SHFE 2106 nickel contract finished the day 0.35% lower at 120,520 yuan/mt, with open interest losing 2,503 lots to 141,000 lots.

Lead: The most-active SHFE 2104 lead contract weakened 0.81% to end the day at 14,675 yuan/mt, with open interest adding 3,535 lots to 38,377 lots. Trades were quiet in the spot market as downstream users purchased only as required amid a low season.

Tin: The most-liquid SHFE 2105 tin contract advanced 0.75% to close the day at 176,480 yuan/mt, with open interest decreasing 125 lots to 32,845 lots, and is expected to fluctuate between 170,000-180,000 yuan/mt tonight.