SMM Evening Comments (Sep 19): Shanghai Nonferrous Metals Closed Mixed amid Worries over Imminent US Rate Resolution

Published: Sep 19, 2022 18:00
Shanghai nonferrous metals closed mixed as the market players focused their attention on the US Fed rate resolution in September as the inflationary pressure seemed to be greater than expected.

SHANGHAI, Sep 19 (SMM) – Shanghai nonferrous metals closed mixed as the market players focused their attention on the US Fed rate resolution in September as the inflationary pressure seemed to be greater than expected.  

Shanghai copper fell 0.55%, aluminium gained 0.21%, lead lost 0.76%, zinc dropped 1.83%, tin slid 0.72%, and nickel declined 1.56%.

Copper: The most-traded SHFE 2210 copper closed up 0.44% or 270 yuan/mt at 62,280 yuan/mt, with open interest down 5,084 lots to 140,415 lots.

On the macro front: (1) In the US, the total oil drilling (mouth) for the week of September 16 stood at 599, and the previous value was 591. (bearish ☆) (2) Eurozone August CPI monthly rate was 0.6%, against the previous value of 0.50% and the forecast of 0.50%. (Bullish ☆).

In the spot market, the premiums fell today amid sluggish response from the buyers. And the market players shall watch the performing of long-term orders as well as the downstream restocking ahead of the National Day holiday.

Aluminium: The most-traded SHFE 2210 aluminium closed down 1.14% or 215 yuan/mt to 18,710 yuan/mt, with open interest down 9,377 lots to 164,204 lots.

In the spot market, the traders were less active today, while the downstream players mainly purchased on rigid demand. The overall transactions were lacklustre. SMM aluminium ingot inventory across major markets in China stood at 685,000 mt, up 10,000 mt from last Thursday, with increment mainly contributed by Shanghai, Wuxi, Nanhai and Gongyi.

Lead: The most-traded SHFE 2210 lead closed down 0.73% or 110 yuan/mt at 14,875 yuan/mt, with open interest up 5,173 lots to 48,274 lots.

In the spot market, the downstream players mostly purchased on dips, and the transactions were moderate. But the inflationary pressure was greater than expected, triggering the expectations of a 100bps rate hike in the US. And the overseas sentiment was depressed.

Zinc: The most-traded SHFE 2210 zinc closed down 0.37% or 90 yuan/mt at 24,480 yuan/mt, with open interest down 6,087 lots to 102,721 lots.

The Russia-Ukraine conflicts are showing clearer directions, and the market concerns over future energy prices eased. And the pessimism over future zinc supply also weakened. But the macro sentiment was still pressured by the expected rate hike in the US. Nonetheless, the low inventory in China still offered strong support to zinc prices.

Tin: The most-traded SHFE 2210 tin closed up 0.33% or 580 yuan/mt at 176,710 yuan/mt, with open interest down 1,512 lots to 31,413 lots.

In the spot market, the smelters were slightly more willing in making quotes in morning trade, and the spread among quotes from the smelters narrowed. For quotes from the traders, the quotes for Yunxi and non-deliverable brands were rarely heard, and the spread between different brands also narrowed. The downstream still purchased on rigid demand, and the buyers were increasingly wait-and-see on higher prices. SHFE warrants inventory fell 56 mt to 1,667 mt today.

Nickel: The most-traded SHFE 2210 nickel closed up 2.29% or 4,240 yuan/mt at 189,600 yuan/mt, with open interest up 10,579 lots to 84,572 lots.

In the spot market, Jinchuan nickel was in premius of 5,500-5,800 yuan/mt, with an average of 5,650 yuan/mt, down 150 yuan/mt from the previous trading day. NORNICKEL nickel was in premiums of 2,500-2,800 yuan/mt, with an average of 2,650 yuan/mt, down 250 yuan/mt on a daily basis. Future prices remained high on Monday, and the spot premiums fell only slightly, while the spot prices were also high. Nickel briquette prices stood at 194,000-195,500 yuan/mt, up 6,450 yuan/mt from a day ago.

[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.]

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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SMM Evening Comments (Sep 19): Shanghai Nonferrous Metals Closed Mixed amid Worries over Imminent US Rate Resolution - Shanghai Metals Market (SMM)