SHANGHAI, Jul 15 (SMM) – Shanghai nonferrous metals closed all with losses. Though most US Fed officers supported a 75 bps rate hike in July instead of 100 bps, which eased the market sentiment to some extent, the market players still expected tightening money policies, which has kept the US dollar index high.
Shanghai copper fell 4.05%, aluminium lost 0.67%, lead slid 1.12%, zinc dropped 2.21%, tin declined 5.75%, and nickel shed 11.85%.
Copper: The most-traded SHFE 2208 copper closed down 4.05% or 2,260 yuan/mt at 53,480 yuan/mt, with open interest down 5,298 lots to 143,350 lots.
Overnight, US Fed officers supported a 75 basis point rate hike in July amid high inflation, and the US dollar index kept hitting new highs.
In the spot market, as of Friday July 15, SMM copper inventory across major Chinese markets increased 1,500 mt from Monday to 120,700 mt, up 2,600 mt from last Friday. Market players mostly quoted against SHFE 2208, and market transactions were limited. Standard-quality copper was in premiums of 200-220 yuan/mt, and good-quality copper in premiums of 220-230 yuan/mt; however, market reaction was muted, and traders had to lower the premiums below 200 yuan/mt.
Aluminium: The most-traded SHFE 2208 aluminium closed down 0.67% or 115 yuan/mt to 17,155 yuan/mt, with open interest down 6,520 lots to 153,381 lots.
Aluminium price was relatively resilient today amid the broadly falling metals prices, as aluminium prices have already dropped to the break-even point; while the demand side remained sluggish with the advent of seasonal low.
Lead: The most-traded SHFE 2208 lead closed down 1.12% or 165 yuan/mt at 14,620 yuan/mt, with open interest up 643 lots to 55,272 lots.
Lead prices dropped below the cost of secondary lead, and both primary and secondary lead smelters were less willing to sell with low prices. Coupled with less sources available in the market ahead of the delivery of SHFE 2207, most goods holders quoted with premiums, while the downstream inquired actively with intention to purchase on dips. Retail sales weakened today.
Zinc: The most-traded SHFE 2208 zinc closed down 2.21% or 490 yuan/mt at 21,720 yuan/mt, with open interest down 3,430 lots to 105,039 lots.
In the spot market, SMM zinc ingot social inventory across seven markets in China totalled 153,700 mt as of Friday July 15, down 3,000 mt from Monday July 11 and 5,200 mt from last Friday July 8. The premiums in Shanghai rose slightly amid falling SHFE zinc prices, though the consumption remained poor. The downstream purchased on dips, while the traders held firm to their offers amid relatively tight supply after the delivery of SHFE 2207.
Tin: The most-traded SHFE 2208 tin closed down 5.75% or 11,060 yuan/mt at 181,190 yuan/mt, with open interest down 8,616 lots to 41,232 lots.
Smelters quoted normally in morning trade, and mainstream smelters lowered the prices. The quotes from traders changed little from yesterday in terms of number and price level. Market transactions improved from a day ago, and the downstream was more willing to purchase amid falling tin prices.
Nickel: The most-traded SHFE 2208 nickel closed down 11.85% or 19,280 yuan/mt at 143,430 yuan/mt, with open interest up 2,087 lots to 91,187 lots.
Nickel prices slumped due to bearish factors from both the macro and fundamentals front. Market demand weakened further amid extensive production cuts of steel mills, coupled with the seasonal low. Pure nickel supply turned to be sufficient against sluggish demand. Since the macro front is without signs of animating, nickel prices could hardly rise significantly.
[Disclaimer: The above representation and data is based on market information SMM believes to be reliable at the time of acquiring as well as the comprehensive assessment by SMM research team, and any and all information provided in this article is for reference only. This article does not constitute a direct recommendation for investment or any decisions in any form and clients shall act on their own discreet and any decisions made by clients are not within the responsibility of SMM.]
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