SMM Evening Comments (Nov 10): Shanghai Nonferrous Metals Closed Mostly with Gains

SHANGHAI, Nov 10 (SMM) – Shanghai nonferrous metals closed mostly with gains today, while the market players are keen on the US inflation data due today.

Shanghai copper gained 0.85%, aluminium added 0.38%, lead jumped 1.77%, zinc fell 0.86%, tin lost 0.87%, and nickel rose 4.3%.

Copper: The most-traded SHFE 2212 copper closed up 0.85% or 560 yuan/mt at 66,750 yuan/mt, with open interest down 4,626 lots to 199,754 lots.

SHFE copper was quite strong in day trading, and spread between SHFE 2211 and 2212 showed signs of narrowing. Most cargo holders preferred to deliver in the futures market, hence sources available in the spot market tightened, and the spot premiums rose slightly. SHFE warrants rose continuously, and the spot premiums are likely to hover around the flat level before the delivery of SHFE 2211.

Aluminium: The most-traded SHFE 2212 aluminium closed up 0.38% or 70 yuan/mt at 18,590 yuan/mt, with open interest up 447 lots to 165,139 lots.

The operating aluminium capacity in Sichuan picked up slowly, but is unlikely to reach full capacity before the end of the year in the dry season. In addition, the commissioning of new capacities in Guizhou and Inner Mongolia as well as the resumption of production in Guagnxi fell short of expectations, alleviating the supply pressure. On the demand side, the aluminium plate/sheet, foil and extrusion sectors were contained by pandemic and insufficient orders. On the other hand, aluminium ingot inventory fell constantly on delayed arrivals.

Lead: The most-traded SHFE 2212 lead closed up 1.77% or 270 yuan/mt at 15,535 yuan/mt, with open interest up 8,716 lots to 59,353 lots.

SHFE lead rose above 15,500 yuan/mt, expanding spread between futures and spot prices prompted the traders to deliver their cargoes to delivery warehouses. The market transactions were still mainly in the form of long-term orders, and transactions with high prices in the spot market were rarely heard.

Zinc: The most-traded SHFE 2212 zinc closed down 0.86% or 205 yuan/mt at 23,520 yuan/mt, with open interest down 7,729 lots to 94,870 lots.

On the fundamentals, refined zinc output is expected to add 23,200 mt in November, and rise further in December. Hence the inventory is likely to rebound from low. Coupled with weakening demand, the support from the fundamentals front weakened. SHFE zinc lacks upside momentum at present.

Tin: The most-traded SHFE 2212 tin closed down 0.87% or 1,480 yuan/mt at 169,090 yuan/mt, with open interest down 895 lots to 33,984 lots.

In the spot market, a few smelters lowered their quotes in early trade to promote the sales, while some others also reduced their prices amid falling SHFE tin. The spot premiums offered by the traders were relatively low, and the spread among different brands narrowed slightly. The market transactions were poor as a whole.

Nickel: The most-traded SHFE 2212 nickel closed up 4.3% or 8,270 yuan/mt at 200,750 yuan/mt, with open interest up 14,568 lots to 93,742 lots.

In the spot market, Jinchuan nickel was in premiums of 4,200-4,500 yuan/mt, with an average of 4,350 yuan/mt, down 550 yuan/mt from a day ago. NORNICKEL nickel was in premiums of 2,700-3,000 yuan/mt, with an average of 2,850 yuan/mt, down 300 yuan/mt on a daily basis. SHFE nickel returned to the 200,000 yuan/mt level today, and the transactions were mostly between the traders. The high nickel prices were unable to be transmitted downstream. For nickel briquette, the prices stood between 199,400-200,200 yuan/mt, up 4,300 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.]