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SMM Evening Comments (Sep 16): Shanghai Nonferrous Metals Closed with Mixed Performance with Power Rationing Remaining as Market Focus
Sep 16,2021 19:00CST
Source:SMM
Shanghai nonferrous metals closed with mixed performance, and the power rationing policy has been intensified in several places, potentially pushing up metal prices.

SHANGHAI, Sep 16 (SMM) – Shanghai nonferrous metals closed with mixed performance, and the power rationing policy has been intensified in several places, potentially pushing up metal prices.

Shanghai copper lost 0.19%, aluminium added 0.96%, lead dropped 0.37%, zinc was flat, tin rose 2.0%, and nickel lost 1.0%.

Copper: The most-traded SHFE 2110 copper closed down 0.19% or 130 yuan/mt to 69650 yuan/mt, with open interest down 5989 lots to 114680 lots.

On the macro front, the growth of US CPI for August fell short of expectations, but the inflation rate was not slow enough to trigger the delay of tapering bond purchase.

Domestically speaking, the RCs of spot copper concentrate continued to rise, and the supply of copper gradually picked up. The output came back to the upward trajectory after the maintenance completed. However, the narrowing spread between copper cathode and copper scrap is likely to bring down the supply of copper scrap, while push up the demand of copper cathode as a substitution for scrap.

Tonight, the market shall watch the US retail sales index.

Aluminium: The most-traded SHFE 2110 aluminium closed up 0.96% or 215 yuan/mt to 22495 yuan/mt, with open interest down 14459 lots to 145000 lots. SMM data showed that the social aluminium inventory added 15,000 mt on the week. The news of power rationing in multiple places came again in the day. And it is likely to impact the supply side more severely than the demand side, though the power rationing will also bring down the operating rates of aluminium processing. The domestic supply of aluminium is still expected to trend down further amid energy consumption control, and shortages of power and coal.

Lead: The most-traded SHFE 2110 lead closed down 0.37% or 55 yuan/mt to 14665 yuan/mt, with open interest down 3604 lots to 83352 lots. Primary and secondary lead smelters were both reluctant to ship goods, while the market transaction was comparative inspiring. And social inventory of lead ingot is still expected to rise.

Zinc: The most-traded SHFE 2110 zinc closed down 0.09% or 20 yuan/mt at 22520 yuan/mt, with open interest down 5297 lots to 75073 lots. On the macro front, the State Council said at a routine meeting that it will ensure the stability of supply and prices of commodities to ease the cost pressures from raw materials. And the National Food and Strategic Reserves Administration will prepare for the following releases of national reserves after the third batch launched on September, 1. Tonight, the market shall watch the jobless claims in the US this week.

Tin: The most-traded SHFE 2110 tin closed up 2.0% at 259110 yuan/mt, with open interest down 126 lots. On the fundamentals, a number of downstream solder companies were pessimistic about the upcoming seasonal high. While the research by SMM showed that the output in August has picked up slightly from July. And the output in September is also likely to see gains on the month. The performance of the demand side remains as the market focus.

Nickel: The most-traded SHFE 2110 nickel closed down 1.0% or 1460 yuan/mt at 145040 yuan/mt, with open interest down 5214 lots to 96544 lots. The output cut polices of stainless steel in Jiangsu, Guangdong and Guangxi intensified today, and many stainless steel mills have followed the requirements to suspend or reduce productions, significantly pushing down the output. SS2110 surged and touched limit up amid worries over market supply. Nickel prices trended down as demand for nickel reduced following the fall in output of stainless steel. However, the downward room of nickel will be limited as the market purchase is likely to pick up in light of falling prices, and the low inventory of LME and SHFE warrants also offers support.

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