SMM Evening Comments (Nov 24): Shanghai Nonferrous Metals Closed Mostly with Gains on Improving Market Sentiment

Published: Nov 24, 2022 18:00

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Shanghai nonferrous metals closed mostly with gains as the dovish signals sent by the US Fed’s November meeting minutes boosted the market sentiment to some extent.

SHANGHAI, Nov 24 (SMM) – Shanghai nonferrous metals closed mostly with gains as the dovish signals sent by the US Fed’s November meeting minutes boosted the market sentiment to some extent.

Shanghai copper added 0.43%, aluminium rose 0.55%, lead gained 0.22%, zinc advanced 0.77%, tin jumped 0.36%, and nickel lost 1.48%.

Copper: The most-traded SHFE 2301 copper closed up 0.43% or 280 yuan/mt at 64,990 yuan/mt, with open interest up 6,364 lots to 144,893 lots.

In the spot market, the premiums of mainstream standard-quality copper with front-month invoice stood at 380-420 yuan/mt early trade, and the cargo holders lowered the premiums to 360-390 yuan/mt in the first trading session with the buyers, mostly traders, actively forcing down the prices. The market transactions weakened slightly in the second trading session, and the premiums were mostly between 350-370 yuan/mt.

Aluminium: The most-traded SHFE 2212 aluminium closed up 0.55% or 105 yuan/mt at 19,055 yuan/mt, with open interest down 12,590 lots to 127,222 lots.

In the spot market, the premiums in Wuxi were firm due to constantly falling local inventory and the transactions were also acceptable. The market in Gongyi was relatively quiet with the arrival of the traditional seasonal low and the heating season, when the small manufacturers extensively reduced the production, while the demand was also weak.

Lead: The most-traded SHFE 2301 lead closed up 0.22% or 35 yuan/mt at 15,725 yuan/mt, with open interest up 2,801 lots to 90,675 lots.

The discounts offered by cargo holders changed little, and downstream players mainly relied on their in-plant stocks approaching the end of the month. The sources held by the traders were also limited, hence the spot market remained quiet as well.

Zinc: The most-traded SHFE 2301 zinc closed up 0.77% or 180 yuan/mt at 23,620 yuan/mt, with open interest up 8,287 lots to 103,114 lots.

According to the November Fed meeting minutes, most officials believe that the rate hike pace will slow down, boosting the macro sentiment. Hence the base metals prices rose quickly after opening today. But the market players shall watch the influences on the macro front.

Tin: The most-traded SHFE 2212 tin closed up 0.36% or 650 yuan/mt at 183,150 yuan/mt, with open interest down 5,980 lots to 32,357 lots.

In the spot market, the futures prices remained high, putting downstream players on the sidelines. And the shipments were poor. SHFE warrants added 154 mt to 3,683 mt, and LME tin inventory fell 45 mt to 3,260 mt.

Nickel: The most-traded SHFE 2212 nickel closed down 1.48% or 2,970 yuan/mt at 198,360 yuan/mt, with open interest down 9,419 lots to 48,086 lots.

On the fundamentals, pure nickel prices lacked support though the inventory remained low. For NPI, the invisible Indonesian NPI flowed into the market, and the prices fell amid production cuts of steel mills. On the demand side, the terminal consumption weakened constantly, but the traders restocked slightly on low inventory. In the alloy sector, the demand for pure nickel was muted. On the whole, weak demand remains the major factor capping the pure nickel prices.

[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.]

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Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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