SMM Evening Comments (Nov 1): Shanghai Nonferrous Metals Closed Mostly with Gains amid Easing Bearish Sentiment

SHANGHAI, Nov 1 (SMM) – Shanghai nonferrous metals closed mostly with gains as the bearish sentiment aggravated in the early stage was digested.

Shanghai copper added 1.57%, aluminium gained 0.56%, lead fell 0.36%, zinc shed 1.63%, tin rose 0.43%, and nickel climbed 3.94%.

Copper: The most-traded SHFE 2212 copper closed up 1.57% or 980 yuan/mt at 63,350 yuan/mt, with open interest down 1,141 lots to 189,728 lots.

In the spot market, SHFE 2211 and 2212 spread narrowed slightly, but the downstream players were still on the sidelines. Premiums of standard-quality copper stood at 220-240 yuan/mt in early trade, with few successful transactions. The premiums then fell quickly to 200 yuan/mt, and market inquiries picked up but the transactions were still poor. The premiums dropped further to 170-200 yuan/mt in the first trading session, which were almost flat to that of good-quality copper. Some standard-quality copper was sold at premiums of 170-180 yuan/mt. The premiums moved all the way down to 150-170 yuan/mt in the second trading session, and the purchases finally picked up.

Aluminium: The most-traded SHFE 2212 aluminium closed up 0.56% or 100 yuan/mt to 17,905 yuan/mt, with open interest down 15,992 lots to 176,411 lots.

From the perspective of the supply side, the production of domestic aluminium smelters is stable on the whole. Aluminium ingot social inventory fell by 8,000 mt from last Thursday to 613,000 mt yesterday due to fewer arrivals. Demand was weak under the influence of pandemic. The overseas liquidity has tightened. SHFE aluminium is vulnerable to decline amid strong pessimism.

Lead: The most-traded SHFE 2212 lead closed down 0.36% or 55 yuan/mt at 15,160 yuan/mt, with open interest down 3,681 lots to 58,765 lots.

On the fundamentals, the primary and secondary lead smelters resumed the production from maintenance, and lead ingot supply rose, while the consumption side was lacklustre, resulting in inventory accumulation. LME lead lost its momentum, so was SHFE lead, which is expected to hover around 15,100 yuan/mt in the near term.

Zinc: The most-traded SHFE 2212 zinc closed down 1.63% or 375 yuan/mt at 22,700 yuan/mt, with open interest down 6,921 lots to 117,954 lots.

SHFE base metals rebounded with the digestion of bearish sentiment after the prices bottomed. SHFE zinc rebounded after hitting low, but still recorded a losing session today.

Tin: The most-traded SHFE 2212 tin closed up 0.43% or 680 yuan/mt at 159,170 yuan/mt, with open interest down 1,161 lots to 42,750 lots.

In the spot market, quotes from the smelters were stable in early trade, and only several smelters raised their offers. The number of quotes from the traders increased palpably, and the supply of different brands was relatively sufficient. But the shipments in the spot market remained poor, capping the spot premiums. Downstream companies boycotted the price hike, and some stood wait-and-see after purchasing on dips earlier.

Nickel: The most-traded SHFE 2212 nickel closed up 3.94% or 7,170 yuan/mt at 189,200 yuan/mt, with open interest up 15,962 lots to 86,352 lots.

In the spot market, Jinchuan nickel was in premiums of 8,000-8,500 yuan/mt today, with an average of 8,250 yuan/mt, up 2,100 yuan/mt from a day ago. NORNICKEL nickel was in premiums of 4,000-4,500 yuan/mt, with an average of 4,250 yuan/mt, up 2,900 yuan/mt on a daily basis. Today, the sellers started to quote against SHFE 2212, the SHFE nickel rose under impacts on the news front, and spot transactions were poor on rising prices. For nickel briquette, the prices stood between 190,500-191,700 yuan/mt, up 8,100 yuan/mt from the previous trading day.

[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.]