SMM Evening Comments (Nov 14): Shanghai Nonferrous Metals Closed Mixed with Digestion of Bullish Factors

SHANGHAI, Nov 14 (SMM) – Shanghai nonferrous metals closed mixed as the market players gradually digested the bullish factors.

Shanghai copper fell 0.87%, aluminium added 0.29%, lead inched up 0.06%, zinc advanced 0.82%, tin edged down 0.08%, and nickel fell 1.58%.

Copper: The most-traded SHFE 2212 copper closed down 0.87% or 590 yuan/mt at 67,010 yuan/mt, with open interest down 12,113 lots to 185,487 lots.

On the macro front, US October CPI rose 7.7% YoY, with an estimate of 7.9% and a previous reading of 8.2%. He seasonally-adjusted US October non-farm payrolls were 261,000, against a previous value of 315,000 and a forecast 200,000.

In the spot market, there is only one trading day left before the delivery of SHFE 2211, but the market players still quoted mainly against this contract. The discounts of standard-quality copper stood at 60 yuan/mt, and were adjusted to 50-30 yuan/mt in the main trading houses. The discounts stood at 30-20 yuan/mt approaching the closing of the morning session.

Aluminium: The most-traded SHFE 2212 aluminium closed up 0.29% or 55 yuan/mt at 18,780 yuan/mt, with open interest up 3,108 lots to 180,681 lots.

On the supply side, the capacity recovery in Guangxi and commissioning of new capacities in Guizhou and Inner Mongolia fell short, easing the supply pressure. In China, aluminium ingot inventory kept falling by 23,000 mt from last Thursday to 553,000 mt as of Monday November 14, a new low. The shorts were cautious in light of the low social inventory. But the consumption was weak, and the longs were not active either.

Lead: The most-traded SHFE 2212 lead closed up 0.06% or 10 yuan/mt at 15,585 yuan/mt, with open interest down 2,412 lots to 57,623 lots.

SHFE lead was high today, and the number of quotes from the cargo holders was low approaching the delivery of SHFE 2211. The primary and secondary lead smelters quoted with large discounts, and the downstream buyers favoured sources from the smelters. The trading market was relatively quiet.

Zinc: The most-traded SHFE 2212 zinc closed up 0.82% or 195 yuan/mt at 23,985 yuan/mt, with open interest down 3,593 lots to 92,760 lots.

SHFE zinc moved rangebound today, and the market has digested the bulls recently. The inventory and warrants remained low approaching the delivery of SHFE 2211, offering support to SHFE zinc price.

Tin: The most-traded SHFE 2212 tin closed down 0.08% or 150 yuan/mt at 177,070 yuan/mt, with open interest up 420 lots to 34,215 lots.

In the spot market, futures price was high in early trade, and the smelters and traders quoted flat or even in discounts amid oversupply. And the downstream players were strongly wait-and-see. The futures price fell in afternoon trade, and some purchases on rigid demand. SHFE warrants added 400 mt to 2,832 mt, and LME inventory rose 65 mt to 3,725 mt.

Nickel: The most-traded SHFE 2212 nickel closed down 1.58% or 3,210 yuan/mt at 200,570 yuan/mt, with open interest down 6,206 lots to 83,407 lots.

On the supply side, nickel price gained support from low pure nickel inventory and uncertainties centering Indonesian export tariffs. The imports of spot pure nickel were in losses again. For NPI, the market was quiet with weak supply and demand. On the demand side, the stainless steel spot market was animated last Friday and Saturday, and spot prices rose frequently. As the sentiment cooled down, the market transactions turned slightly quiet. To sum up, SHFE nickel price fluctuated greatly recently subject to the macro policies on the backdrop of weak supply and demand.

[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.]