SHANGHAI, Oct 19 (SMM) – Shanghai nonferrous metals closed largely with gains amid uncertainties over the US interest hike prospect and as the domestic market lacked new stimulus.
Shanghai copper rose 0.24%, aluminium edged 0.12%, lead added 1.77%, zinc fell 0.4%, tin increased 2.52%, and nickel climbed 0.94%.
Copper: The most-traded SHFE 2111 copper closed up 0.24% or 180 yuan/mt to 75810 yuan/mt, with open interest down 8520 lots to 149675 lots.
On the macro front, the US manufacturing reading for September fell out of expectation amid multiple factors including the short supply of raw materials, the greatest fall since February. The Fed’s interest rate hike becomes more uncertain amid the falling US manufacturing reading.
On the fundamentals, LME copper inventory has been falling for 14 consecutive days, and the proportion of cancelled warrants still stood at a high level. The LME 0-3 spread stood in backwardation, and surged to above $1,100/mt in the last trading. The near-term copper is likely to remain high.
The market shall closely watch the changes in LME inventory and cancelled warrants.
Aluminium: The most-traded SHFE 2111 aluminium closed up 0.12% or 30 yuan/mt to 24340 yuan/mt, with open interest down 16535 lots to 155646 lots.
On the supply side, the aluminium operating rates may fall further amid the extended power rationing in the heating season in north China. While on the demand side, the downstream consumption has been suppressed by the power rationing. And the domestic inventory of aluminium has been on the rise according to SMM survey.
Lead: The most-traded SHFE 2111 lead closed up 1.77% or 275 yuan/mt at 15840 yuan/mt, with open interest down 1252 lots to 49427 lots.
Recently, the lead prices have been rising continuously, and the smelters actively made shipments. While the downstream sector mostly took delivery under long-term contracts. The prices of battery scrap increased only slightly. The quotes of secondary lead in Jiangsu and Anhui have been relatively firm amid power rationing, and profits of secondary lead picked up significantly. The domestic non-ferrous metals were bullish as a whole, offering some support to SHFE lead.
Zinc: The most-traded SHFE 2111 zinc closed down 0.4% or 110 yuan/mt at 27275 yuan/mt, with open interest down 14006 lots to 77301 lots.
On the macro front, Russian President Putin indicated that Russia is able to help stabilise the natural gas market in the Eurozone by increasing the supply of national gas. However, the both side have great differences on the supply. According to the latest data, there is no signs of Russia’s increasing its supply of national gas for the moment. As such, the natural gas in the Eurozone surged again on Monday. The November futures contract of natural gas has increased by 18% to €104/MWh. China’s GDP growth rate in the third quarter recorded 4.9%, falling short of expectations. And the domestic economic recovery faces more uncertainties amid the repeated COVID-19 pandemic and intensifying power rationing.
Tin: The SHFE 2111 tin closed up 2.52% or 7200 yuan/mt at 293220 yuan/mt, with open interest down 3870 lots to 25121 lots.
On the fundamentals, the spot supply was better than the previous sessions, which might be a result of the inflows of products after the delivery of SHFE 2110 contract. However, the total inventory was still at a low level, supporting tin prices logically in the short term.
Nickel: The most-traded SHFE 2111 nickel closed up 0.94% or 1400 yuan/mt to 151040 yuan/mt, with open interest down 2013 lots to 88553 lots.
The SHFE nickel moved up in line with the rising intraday LME nickel, while the stainless steel futures fell slightly. The fundamentals were unable to fuel the nickel prices to a higher level, and it needs new engines for nickel prices to break the current resistance.
