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SMM Evening Comments (Sep 17): Shanghai Nonferrous Metals Closed with Mixed Performance with Nickel Plummeting almost 3%
Sep 17,2021 19:00CST
Source:SMM
Shanghai nonferrous metals closed with mixed performance, and the power rationing has been disrupting the production of metals, which remains as the market focus.

SHANGHAI, Sep 17 (SMM) – Shanghai nonferrous metals closed with mixed performance, and the power rationing has been disrupting the production of metals, which remains as the market focus.

Shanghai copper rose 1.34%, aluminium fell 0.22%, lead was flat, zinc edged up 0.75%, tin advanced 0.6%, and nickel plummeted 2.57%.

Copper: The most-traded SHFE 2110 copper closed down 1.34% or 940 yuan/mt to 69270 yuan/mt, with open interest down 8420 lots to 106300 lots.

On the macro front, the overnight US retail sales for August climbed beyond expectations, easing market concerns over a slowing economy. While the strong reading has pushed the market to the hawkish side with possibly earlier tapering bond purchase, thus the inventors became more cautious, greatly pulling up the US dollar index.

Tonight, the market shall pay attention to the final CPI on an annual basis for August in the Eurozone. The market estimate goes that the final inflation rate on an annual basis for August will exceed expectations again, which is likely to accelerate the tapering in some European countries.

Aluminium: The most-traded SHFE 2111 aluminium closed down 0.22% or 50 yuan/mt to 22585 yuan/mt, with open interest down 932 lots to 261000 lots. The rumour came again that power rationing has been carried out in Guizhou, Guangdong and Jiangsu. Those influenced in the upstream involve the aluminium and alumina plants in Guizhou. But some large processing companies in the downstream reported that they were only slightly impacted by the power rationing, and the restocking demand ahead of Mid-Autumn Festival picked up. Social aluminium inventory added 15,000 mt the week but fell 5,000 mt from Monday September 13.

Lead: The most-traded SHFE 2110 lead closed up 0.07% or 10 yuan/mt to 14665 yuan/mt, with open interest down 9179 lots to 74173 lots. The downstream was active in restocking on demand ahead of the festival, the trading market followed suit. The inventory in some regions fell slightly, though the overall social inventory kept rising this week.

Zinc: The most-traded SHFE 2110 zinc closed up 0.75% or 170 yuan/mt at 22780 yuan/mt, with open interest down 788 lots to 74285 lots. On the macro front, the National Development and Reform Commission expressed that it will focus on stabilising and promoting individual incomes, and further optimizing the reforms of electricity pricing, and ensuring the live pig market stability.

On the news front, all industrial enterprises in two cities in Jiangsu (Taizhou and Xinghua) have been required to suspend production until October, 8, which will have significant impacts on the downstream sector and terminal entities.

Tin: The most-traded SHFE 2110 tin closed up 0.6% at 260300 yuan/mt, with open interest down 1965 lots. On the fundamentals, the spot available in the market was comparatively tight. The power rationing has brought great impacts to the production activities in Guangxi, while Yunnan was less affected, according to initial research. The market shall watch the near-term performance of SHFE tin around 260,000 yuan/mt as well as the trending of LME tin during the Mid-Autumn Festival holiday.

Nickel: The most-traded SHFE 2110 nickel closed down 2.57% or 3780 yuan/mt at 143490 yuan/mt, with open interest down 9603 lots to 86941 lots. The prices of nickel ore stood firm, and the prices of ferronickel remained at a high level. However, the concerns over output cut of stainless steel has brought down the demand for nickel, signalling bearish trending of nickel prices. Intraday news, which has not been verified, came that Indonesia is likely to limit the exports of nickel products with nickel content of less than 40%. LME nickel surged to above $20,000/mt on the news, which will later influence SHFE nickel.

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