SMM Evening Comments (Nov 8): Shanghai Nonferrous Metals Closed Mixed with Eyes on US Inflation Data

SHANGHAI, Nov 8 (SMM) – Shanghai nonferrous metals closed mixed as the investors await the US inflation data following the recent rate hike to get a glimpse into the next and future rate path.

Shanghai copper gained 0.3%, aluminium added 0.57%, lead was flat, zinc advanced 0.23%, tin climbed 1.43%, and nickel lost 0.42%.

Copper: The most-traded SHFE 2212 copper closed up 0.3% or 200 yuan/mt at 65,780 yuan/mt, with open interest down 1,184 lots to 200,587 lots.

In the spot market, the discounts of mainstream standard-quality copper stood at 60-40 yuan/mt, and then expanded to 80-100 yuan/mt with rising SHFE copper and for the purpose of attracting buyers. The transactions picked up slightly after SHFE copper fell slightly in mainstream trading hours, and the traders took the chance to lower the discounts further to 150-130 yuan/mt.

Aluminium: The most-traded SHFE 2212 aluminium closed up 0.57% or 105 yuan/mt at 18,450 yuan/mt, with open interest up 4,372 lots to 155,436 lots.

On the supply side, the current hydropower supply in Sichuan is still tight, and the production resumption of local smelters has been slow. Some aluminium smelters in Henan province reduced production. In addition, the release of new capacity and resumption of idled capacity are slow, thus the supply pressure has somewhat eased. Downstream operating rates improved slightly as the impact of the pandemic has weakened. However, the production and transportation of downstream enterprises will continue to be affected by the pandemic in the short term. It is expected that SHFE aluminium will remain rangebound in the short term.

Lead: The most-traded SHFE 2212 lead closed down 0.03% or 5 yuan/mt at 15,165 yuan/mt, with open interest down 600 lots to 48,721 lots.

The sellers quoted based on the market dynamics as SHFE lead remained volatile today, and some sources were sold with slight premiums. The downstream players, on the other hand, purchased on demand, and favoured secondary lead with clear price advantage. The transactions in the refined lead trading market changed little. SHFE lead is expected to remain rangebound in the near term.

Zinc: The most-traded SHFE 2212 zinc closed up 0.23% or 55 yuan/mt at 23,715 yuan/mt, with open interest up 619 lots to 104,548 lots.

SHFE zinc showed a V-shaped move today, and was dragged on by LME zinc in the afternoon trading. The contract then rebounded and clawed back some of the losses amid low social and warrants inventory. The market players shall watch the guidance offered by inflation data due recently.

Tin: The most-traded SHFE 2212 tin closed up 1.43% or 2,370 yuan/mt at 167,700 yuan/mt, with open interest down 1,426 lots to 35,863 lots.

In the spot market, the smelters and traders were more willing to lower the prices in order to promote the sales in early trade. However, low premiums failed to boost market transactions. SHFE warrants added 63 mt to 1,941 mt, and LME tin inventory fell 130 mt to 4,140 mt.

Nickel: The most-traded SHFE 2212 nickel closed down 0.42% or 810 yuan/mt at 192,190 yuan/mt, with open interest down 7,767 lots to 76,464 lots.

In the spot market, Jinchuan nickel was in premiums of 5,500-5,800 yuan/mt today, with an average of 5,650 yuan/mt, down 100 yuan/mt on a daily basis. NORNICKEL nickel was in premiums of 3,400-3,500 yuan/mt, with an average of 3,450 yuan/mt, up 50 yuan/mt from a day ago. The absolute spot prices changed little today as SHFE nickel price was relatively stable, but the spot premiums rebounded slightly with sources of imported pure nickel remaining tight amid enduring import losses. For nickel briquette, the prices stood at 191,300-192,300 yuan/mt, down 200 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.]