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SMM Evening Comments (Jun 17): Shanghai nonferrous metals declined for the most part after Fed signaled 2023 rate hikes
Jun 17,2021 18:00CST
SMM Comments
Source:SMM
SHFE nonferrous metals broadly fell on Thursday June 17 as global markets reacted to the Federal Reserve's signal that rate hikes will come sooner than expected.

SHANGHAI, Jun 17 (SMM) – SHFE nonferrous metals broadly fell on Thursday June 17 as global markets reacted to the Federal Reserve's signal that rate hikes will come sooner than expected.

Nickel dropped 1.91% to lead the losses, copper shed 0.32%, tin declined 0.14%, and aluminium fell 0.24%, while zinc advanced 0.42% and lead climbed 0.85%.

The ferrous complex rose across the board. Iron ore increased 1.03%, rebar rose 0.26%, and hot-rolled coil climbed 0.32%.

Copper: The most-traded SHFE 2107 copper contract finished the day 0.32% lower at 68,800 yuan/mt. Open interest fell 14,560 lots to 111,000 lots. The Fed kept the benchmark interest rate and bond purchase plan unchanged. The bitmap predicts that there will be two interest rate hikes before the end of 2023, and the policy tightening speed is expected to be faster than previously expected. Committee members will begin to discuss the plan to reduce debt purchase. The Federal Reserve raised its inflation forecast from 2021 to 2023, and both the overnight reverse repurchase instrument interest rate and the excess reserve interest rate were raised by 5 basis points. US Treasury Secretary Yellen said that the economy was recovering from the impact of the new crown epidemic and hopes that Congress will support Biden's spending plan. The increase in capital gains tax in April 2021 was not a retroactive tax increase, and the partial eagle signal dragged down US stocks to the biggest decline in a month. Affected by this, the US dollar index closed up to around 91.5, setting a new high in the past two months. The number of initial jobless claims in the US will be announced tonight, and the labor employment data became the most important target data of the Federal Reserve.

Aluminium: The most-liquid SHFE 2107 aluminium contract finished the day 0.24% lower at 18,690 yuan/mt. Open interest fell 7,244 lots to 160,044 lots. SMM data showed that aluminium billet stocks across the five major consumption areas — Foshan, Wuxi, Huzhou, Changzhou and Nanchang — in China increased 14% or 12,400 mt from a week ago to 100,700 mt as of Thursday June 17.

Zinc: The most-active SHFE 2107 zinc contract closed up 0.42% at 22,650 yuan/mt. Open interest rose 1,049 lots to 80,864 lots.

Nickel: The most-traded SHFE 2107 nickel contract ended the day 1.91% lower at 127,720 yuan/mt today. Open interest fell 9,097 lots to 99,089 lots.

Lead: The most-traded SHFE 2107 lead contract ended the day 0.85% higher at 15,370 yuan/mt. Open interest fell 7,710 lots to 46,281 lots. Recently, overseas lead prices traded strongly and domestic lead prices were weak with the tight import of lead concentrate and crude lead and the ever-rising social inventories of lead ingots. SHFE lead continued to fluctuate between 15,000-15,500 yuan/mt. Near the weekend, some downstream buyers who waited on the sidelines at the beginning of the week began to purchase on rigid demand, and the trading situation in the spot market improved slightly. Whether the contract could stand above 15,300 yuan/mt will be monitored tonight.

Tin: The most-liquid SHFE 2108 tin contract fell to a session low of 201,820 yuan/mt and finished the day 0.62% higher at 205,630 yuan/mt today. Open interest rose 1,503 lots to 30,563 lots. The rebound of the US dollar suppressed the trend of tin prices, while the shortage of spot supply of tin ingots at home and abroad supported tin prices. It is expected that tin prices will remain high and fluctuate in the near term. Pressure above will be seen from 210,000 yuan/mt today. Support below will be seen from 203,000 yuan/mt today.

Evening comments
Copper
Aluminium
Zinc
Nickel
Lead
Tin

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