SMM Evening Comments (Oct 13): Shanghai Nonferrous Metals Closed Mostly with Losses as Investors Brace for US Inflation Reading

SHANGHAI, Oct 13 (SMM) – Shanghai nonferrous metals closed mostly with losses as the investors brace for the US inflation data due soon.

Shanghai copper edged down 0.02%, aluminium fell 0.14%, lead advanced 0.1%, zinc shed 0.06%, tin lost 1.44%, and nickel slid 0.42%.

Copper: The most-traded SHFE 2211 copper closed down 0.02% or 10 yuan/mt at 62,340 yuan/mt, with open interest up 689 lots to 160,522 lots.

On the macro front, (1) China September social financing scale growth stood at 35.3 trillion yuan, against a previous reading of 24.3 trillion yuan and a forecast of 27.5 trillion yuan. (bullish ☆). (2) US September PPI monthly rate recorded 0.4%, with a previous print of -0.10% and a forecast of 0.20%. (Bearish ☆).

In the spot market, SHFE 2210 and 2211 spread remained in wide backwardation structure, manipulating the changes of spot premiums in recent days. With the approaching of SHFE 2210 delivery, the demand for sources qualified for delivery and as warrants rose, especially when compared with demand for other sources.

Aluminium: The most-traded SHFE 2211 aluminium closed down 0.14% or 25 yuan/mt to 18,355 yuan/mt, with open interest down 1,996 lots to 142,114 lots.

The fundamentals of aluminium changed little recently, featuring both production cuts and growth, and the supply pressured fell as a whole. And the consumption side can still be expected. Nonetheless, the resurging pandemic may potentially weigh on downstream operating rates.

On the news front, the potential sanction of US on Russia aluminium boosted aluminium contract overnight, while the SHFE aluminium remained relatively stable.

Lead: The most-traded SHFE 2211 lead closed up 0.1% or 15 yuan/mt at 15,280 yuan/mt, with open interest up 2,328 lots to 59,980 lots.

In the spot market, the quotes offered by most smelters remained flat, and the market shipments were stable in light of modest downstream purchases. On the whole, short-term SHFE lead will keep fluctuating in a narrow range.

Zinc: The most-traded SHFE 2211 zinc closed down 0.06% or 15 yuan/mt at 24,540 yuan/mt, with open interest down 154 lots to 121,602 lots.

SMM refined zinc output stood at 503,900 mt in September, falling short of expectations and offering support to SHFE zinc. Considering narrowing SHFE 2210 and 2211 spread after peaking, SHFE zinc lacks upside momentum.

Tin: The most-traded SHFE 2211 tin closed down 1.44% or 2,530 yuan/mt at 173,080 yuan/mt, with open interest up 3,618 lots to 42,417 lots.

In the spot market, the quotes offered by the smelters changed little compared with the previous trading day, and some smelters lowered the offers to promote the sales. The spread among quotes offered by the traders concerning different brands remained stable, and the spot market posted no surprises. The downstream buyers still purchases as appropriate, and the traded prices of deliverable brands stood between 181,000-181,500 yuan/mt, and the prices of imported cargoes were lower than domestic ones.

Nickel: The most-traded SHFE 2211 nickel closed down 0.42% or 760 yuan/mt at 178,910 yuan/mt, with open interest up 6,719 lots to 68,638 lots.

In the spot market, Jinchuan nickel was in premiums of 10,000-12,000 yuan/mt, with an average of 11,000 yuan/mt, down 500 yuan/mt from a day ago. NORNICKEL nickel was in premiums of 3,800-4,500 yuan/mt, with an average of 4,150 yuan/mt, down 200 yuan/mt on a daily basis. Pure nickel spot prices rose as SHFE nickel opened high in morning trader following the night session. In addition, the supply of Jinchuan nickel improved slightly after arrivals in succession. For nickel briquette, the prices now stood between 186,500-187,500 yuan/mt, up 4,350 yuan/mt from yesterday. The cost efficiency of briquette was still poor.

[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.]