SMM Evening Comments (Nov 15): Shanghai Nonferrous Metals Closed Mostly with Gains

SHANGHAI, Nov 15 (SMM) – Shanghai nonferrous metals closed mostly with gains as the voices of slowing rate hikes peaced the market sentiment to some extent.

Shanghai copper fell 0.44%, aluminium added 0.13%, lead rose 1.66%, zinc advanced 2.24%, tin jumped 2.79%, and nickel gained 1.06%.

Copper: The most-traded SHFE 2212 copper closed down 0.44% or 300 yuan/mt at 67,190 yuan/mt, with open interest down 8,255 lots to 177,232 lots.

In the spot market, the cargo holders mostly quoted against SHFE 2212 as SHFE 2211 will be delivered. The market participants were mostly traders as most downstream players stood on the sidelines on the last trading day of SHFE 2211 and decided to enter the market when situation fits after SHFE 2211 is delivered. The premiums of mainstream standard-quality copper stood at 380-400 yuan/mt over SHFE 2212 in early trade, and then fell to 330-360 yuan/mt in the first trading session. The premiums stabilised at 340 yuan/mt around noon time.

Aluminium: The most-traded SHFE 2212 aluminium closed up 0.13% or 25 yuan/mt at 18,925 yuan/mt, with open interest down 680 lots to 180,001 lots.

The production resumptions in Guangxi, and commissioning of new capacity in Guizhou and Inner Mongolia are still less than expected, hence the supply pressure has eased. The domestic downstream consumption remains weak. SHFE aluminium is expected to rise in the short term due to expectations for slower US interest rate hikes.

Lead: The most-traded SHFE 2212 lead closed up 1.66% or 260 yuan/mt at 15,880 yuan/mt, with open interest up 4,172 lots to 61,795 lots.

In the spot market, the number of quotes from the cargo holders was small as today marks the delivery of SHFE 2211. Most smelters sold with discounts, while the downstream players purchases on rigid demand in the form of long-term orders. The transactions in the spot market were lacklustre.

Zinc: The most-traded SHFE 2212 zinc closed up 2.24% or 535 yuan/mt at 24,460 yuan/mt, with open interest up 2,497 lots to 95,257 lots.

SHFE zinc still gained support from low inventory as the SMM zinc ingot social inventory added merely 2,200 mt on a weekly basis to 62,700 mt as of Monday November 14.

Tin: The most-traded SHFE 2212 tin closed up 2.79% or 4,990 yuan/mt at 184,000 yuan/mt, with open interest up 15,619 lots to 49,834 lots.

In the spot market, quotes offered by the smelters mostly hovered around 180,000 yuan/mt. The spot premiums offered by the traders were stable, and fell after SHFE tin rose. But the market transactions failed to pick up. The downstream players still purchased on rigid demand. And rapidly rebounding prices put some players on the sidelines.

Nickel: The most-traded SHFE 2212 nickel closed up 1.06% or 2,170 yuan/mt at 206,460 yuan/mt, with open interest down 8,462 lots to 74,945 lots.

In the spot market, Jinchuan nickel was in premiums of 3,500-3,800 yuan/mt, with an average of 3,650 yuan/mt, down 200 yuan/mt from the previous trading day. NORNICKEL nickel was in premiums of 1,900-2,100 yuan/mt, with an average of 2,000 yuan/mt, down 150 yuan/mt on a daily basis. As SHFE nickel remained high, the absolute spot prices of pure nickel were also kept at a high level, but the market transactions weakened. For nickel briquette, the prices stood between 207,000-207,600 yuan/mt, up 5,500 yuan/mt from a day ago.

[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.]