SMM Evening Comments (Sep 8): Shanghai Nonferrous Metals Closed with Mixed Performance amid Quiet Macro Front

SHANGHAI, Sep 8 (SMM) – Shanghai nonferrous metals mostly closed with mixed performance as the macro front was basically quiet.

Shanghai copper fell 0.94%, aluminium added 0.94%, lead lost 0.17%, zinc rose 0.64%, tin slid 0.25%, and nickel advanced 1.42%.

Copper: The most-traded SHFE 2110 copper closed down 0.94% or 650 yuan/mt to 68680 yuan/mt, with open interest down 1895 lots to 120500 lots.

On the macro front, the White House said that Joe Biden will announce new plans on containing delta variant and enhancing COVID-19 booster shots on Thursday, bolstering market sentiment of economy recovery. Overnight UK hawkish rhetoric declared that interest rate hike in the next year will be a wise decision. US dollar index rebound in last trading day, pressuring copper prices. For intraday news, France released its trade data for July, which was far below expectations as front month export and import fell 2.2% and 0.6%, respectively, indicating imbalance in global economy recovery.

Tonight, the market shall watch US consumer credit index for July.

Aluminium: The most-traded SHFE 2110 aluminium closed up 0.94% or 205 yuan/mt to 21935 yuan/mt, with open interest up 7516 lots to 294000 lots. Intraday price touched 22075 yuan/mt, the highest in almost 15 years, on the back of turmoil in Guinea and concerns over supply in Guangxi and Inner Mongolia.

Lead: The most-traded SHFE 2110 lead closed down 0.17% or 25 yuan/mt to 14895 yuan/mt, with open interest up 781 lots to 93946 lots.

Secondary lead smelters made deliveries at narrow discounts, but in fear of further falling in prices. Costs of refined lead smelters were relatively high, and smelters made deliveries while holding prices firm.

Zinc: The most-traded SHFE 2110 zinc closed up 0.64% or 145 yuan/mt at 22630 yuan/mt, with open interest up 14292 lots to 105680 lots.

On the fundamentals, spot premiums in Shanghai fell slightly as the released government reserves are expected to enter the market by this Friday. Surrender of traders broke the deadlock between sellers and buyers. The transaction market was relatively vibrant.

Tin: The most-traded SHFE 2110 tin closed down 0.25% at 244000 yuan/mt, with open interest down 1558 lots. On the fundamentals, upstream output rose slightly on the month according to initial survey carried out by SMM. Seasonal low in downstream sector came to an end, and the electronics sector welcomed the traditional high season. Supply and demand pattern is expected to stay in balance in the short term. The market shall watch the impact of situation in Myanmar to the supply side.

Nickel: The most-traded SHFE 2110 nickel closed up 1.42% or 2070 yuan/mt at 148170 yuan/mt, with open interest up 13378 lots to 140914 lots.

On the supply side, demand from the new energy sector stayed for the moment amid uncertainties in the follow-up period as chip shortage remains as an influencing factor. Production restrictions of stainless steel was bearish for nickel prices, and the market shall also watch the production schedules of 300-series.

On the demand side, cost stayed high and supply remained tight on the back of high prices of nickel ore and ferronickel, potentially pushing up nickel prices.