SMM Evening Comments (Nov 29): Shanghai Nonferrous Metals Closed Improving Market Sentiment

SHANGHAI, Nov 29 (SMM) – Shanghai nonferrous metals closed all with gains. On the macro front, market sentiment was boosted in the afternoon as information about domestic covid preventive and control adjustments began to influence market sentiment, with a sharp intra-day rally in the Chinese yuan, reinforced by news about enhanced vaccinations among the elderly. In addition, China Securities Regulatory Commission released relative measures again to ease financial pressures on housing companies.

Shanghai copper added 0.81%, aluminium rose 1.76%, lead jumped 0.42%, zinc advanced 1.7%, tin gained 1.91%, and nickel climbed 1.17%.

Copper: The most-traded SHFE 2301 copper closed up 0.81% or 520 yuan/mt at 65,080 yuan/mt, with open interest down 403 lots to 147,420 lots.

On the macro front: (1) In the evening of November 28, the China Securities Regulatory Commission decided to release five measures aiming at adjusting and optimising the real estate equity financing with immediate effect. (bullish ☆). (2) St. Louis Fed President Bullard said the Fed needs to raise interest rates further and then keep them high in both 2023 and 2024 to control inflation (bearish ☆)

In the spot market, pandemic risk became a normal influencing factor, which required constant attention. The market liquidity dropped approaching the end of the month, some players in need of cargoes with front-month invoice were still active. As the spread between cargoes with front-month and next-month invoices exceeded 50 yuan/mt, some traders forced down the prices of sources with next-month invoice to get lower prices of front-month invoice.

Aluminium: The most-traded SHFE 2301 aluminium closed up 1.76% or 330 yuan/mt at 19,030 yuan/mt, with open interest up 20,696 lots to 223,195 lots.

SHFE aluminium stabilised at a high level today. Spot cargoes were in premiums of 80 yuan/mt over SHFE 2212 in east China, flat from yesterday. The traded prices in Wuxi were close to the average price of SMM A00 aluminium ingot.

Lead: The most-traded SHFE 2301 lead closed up 0.42% or 65 yuan/mt at 15,670 yuan/mt, with open interest up 2,196 lots to 83,996 lots.

Sources circulating in the spot market were low, and the smelters mainly quoted with small discounts. The downstream consumption was modest, and the purchasing activities were muted. Spreading pandemic recently has disrupted the lead ingot transportation to some extent. Coupled with rising secondary refined lead costs, SHFE lead will remain high in the near term.

Zinc: The most-traded SHFE 2301 zinc closed up 1.7% or 400 yuan/mt at 23,980 yuan/mt, with open interest up 8,158 lots to 116,474 lots.

Boosted by real estate policies, base metals prices rose. SHFE zinc moved rangebound with the mixture of bears and bulls.

Tin: The most-traded SHFE 2301 tin closed up 1.91% or 3,470 yuan/mt at 184,750 yuan/mt, with open interest up 3,814 lots to 52,052 lots.

In the spot market, the spot transactions were relatively poor after SHFE tin rebounded. SHFE warrants dropped 49 mt to 3,704 mt.

Nickel: The most-traded SHFE 2301 nickel closed up 1.17% or 2,260 yuan/mt at 194,950 yuan/mt, with open interest down 3,810 lots to 72,131 lots.

In the spot market, Jinchuan nickel was in premiums of 4,800-5,000 yuan/mt, with an average of 4,900 yuan/mt, up 300 yuan/mt from a day ago. NORNCIEL nickel was in premiums of 2,800-3,000 yuan/mt, with an average of 2,900 yuan/mt, up 200 yuan/mt on a daily basis. The spot premiums rebounded following SHFE nickel moves in the morning, and the absolute spot prices were above 200,000 yuan/mt again. For nickel briquette, the prices stood between 196,700-198,000 yuan/mt.

[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.]