SMM Evening Comments (Nov 21): Shanghai Nonferrous Metals Closed with Losses on Rising US Dollar

SHANGHAI, Nov 21 (SMM) – Shanghai nonferrous metals closed all with losses as the rebounding intraday US dollar index weighed on base metal prices.

Shanghai copper fell 1.26%, aluminium slid 0.66%, lead lost 0.1%, zinc shed 0.41%, tin dropped 2.89%, and nickel declined 0.94%.

Copper: The most-traded SHFE 2212 copper closed down 1.26% or 830 yuan/mt at 65,030 yuan/mt, with open interest down 15,244 lots to 132,812 lots.

In the spot market, SHFE 2012 extended the downward trend last week, and fell nearly 1,000 yuan/mt once. The spread between SFHE 2212 and 2301 rose and hit a high of 380 yuan/mt, which supported spot premiums. The premiums of mainstream standard-quality copper stood at 400-420 yuan/mt in early trade, and market inquiries were active. The premiums then were adjusted to 380-410 yuan/mt in mainstream trading hours, while the transactions were mostly made between 390-400 yuan/mt. The overall trading market was relatively active today.

Aluminium: The most-traded SHFE 2212 aluminium closed down 0.66% or 125 yuan/mt at 18,945 yuan/mt, with open interest down 19,231 lots to 163,745 lots.

Aluminium ingot social inventory kept falling, which lost 17,000 mt on a weekly basis to 530,000 mt as of Monday November 21, according to SMM. Falling SHFE aluminium offered some support to spot premiums, and the transactions were moderate. The follow-up social inventory change is worth attention with the expected arrivals.

Lead: The most-traded SHFE 2212 lead closed down 0.1% or 15 yuan/mt at 15,650 yuan/mt, with open interest down 3,451 lots to 41,345 lots.

In the spot market, the orders received by middle and small-sized lead-acid battery companies weakened slightly, and they were less interest in purchasing raw materials. The smelters mainly delivered long-term orders as these orders would expire soon. Sources in the spot market were scarce, and some downstream players purchased from nearby warehouses. SHFE lead is likely to remain rangebound with the mixture of longs and shorts.

Zinc: The most-traded SHFE 2212 zinc closed down 0.41% or 100 yuan/mt at 24,205 yuan/mt, with open interest down 3,437 lots to 80,737 lots.

Base metals fell amid rebounding intraday US dollar index. Meanwhile, muted downstream production also weighed on SHFE zinc. However, the contract is relative resilient with support of low social inventory, and is likely to keep rangebound in the near term.

Tin: The most-traded SHFE 2212 tin closed down 2.89% or 5,280 yuan/mt at 177,650 yuan/mt, with open interest up 67 lots to 43,944 lots.

In the spot market, SHFE tin finally pulled back after staying high for some time, and the purchases in the spot market were quite active. SHFE warrants fell 2 mt to 3,553 mt, and LME tin inventory remained unchanged at 3,415 mt.

Nickel: The most-traded SHFE 2212 nickel closed down 0.94% or 1,880 yuan/mt at 197,130 yuan/mt, with open interest down 3,253 lots to 59,025 lots.

In the spot market, Jinchuan nickel was in premiums of 4,700-4,800 yuan/mt, with an average of 4,750 yuan/mt, up 850 yuan/mt from the previous trading day. NORNICKEL nickel was in premiums of 2,200-2,500 yuan/mt, with an average of 2,350 yuan/mt, up 250 yuan/mt on a daily basis. SHFE nickel fell after opening with influences on the news front, and the absolute spot prices fell nearly 3,000 yuan/mt though the spot premiums rebounded slightly. The transactions picked up slightly. For nickel briquette, the prices stood between 196,700-197,300 yuan/mt, down 3,800 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.]