SMM Evening Comments (Dec 5): Shanghai Nonferrous Metals Closed All with Gains amid Signs of Easing Pandemic Control in China

Published: Dec 5, 2022 18:00

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Shanghai nonferrous metals closed all with gains as the market confidence was boosted by the signs of relaxing pandemic control measures in China.

SHANGHAI, Dec 5 (SMM) – Shanghai nonferrous metals closed all with gains as the market confidence was boosted by the signs of relaxing pandemic control measures in China.

Shanghai copper gained 0.65%, aluminium rose 0.73%, lead jumped 1.68%, zinc added 0.04%, tin advanced 3.94%, and nickel climbed 3%.

Copper: The most-traded SHFE 2301 copper closed up 0.65% or 430 yuan/mt at 66,260 yuan/mt, with open interest down 2,139 lots to 145,004 lots.

The downstream consumption was again weighed on after SHFE copper opened high in the morning, but the spot market extended the animation last Friday. The premiums of mainstream standard-quality copper stood at 480-500 yuan/mt in early trade, with few transactions. The premiums were forced down to 460 yuan/mt in the main trading hours, but the cargo holders insisted 470-490 yuan/mt, and most of the trades were made at 480 yuan/mt.

Aluminium: The most-traded SHFE 2301 aluminium closed up 0.73% or 140 yuan/mt at 19,320 yuan/mt, with open interest up 668 lots to 227,521 lots.

On the supply side, domestic operating aluminium capacity rose but slightly. On the demand side, slowing global economy resulted in few orders received by aluminium fabricators, but the market confidence was boosted by signals of loosening pandemic control measures. To sum up, the SHFE zinc contract will be struggling for a direction with the mixture of bulls and shorts.

Lead: The most-traded SHFE 2301 lead closed up 1.68% or 265 yuan/mt at 16,005 yuan/mt, with open interest up 7,635 lots to 88,470 lots.

The cargo holders were more willing to ship their cargoes to delivery warehouses with expanding spread between futures and spot prices. The quotes were still in discounts, which changed little from last Friday. And the downstream players generally stood wait-and-see, while those with rigid demand were more active, but could hardly reach an agreement with the seller. High-priced lead ingot was not easy to find a proper buyer.

Zinc: The most-traded SHFE 2301 zinc closed up 0.04% or 10 yuan/mt at 24,520 yuan/mt, with open interest down 3,634 lots to 121,010 lots.

SHFE zinc was relatively stable today with longs leaving the market after paying off. SMM zinc ingot social inventory across the seven markets in China totalled 54,500 mt, up 3,400 mt from last Friday, but was still at a low level.

Tin: The most-traded SHFE 2301 tin closed up 3.94% or 7,370 yuan/mt at 194,530 yuan/mt, with open interest up 10,281 lots to 60,331 lots.

In the spot market, the downstream players were strongly wait-and-see after SHFE tin rose, and the spot market was relatively quiet. SHFE warrants inventory added 48 mt to 4,335 mt, and LME tin inventory fell 25 mt to 3,085 mt.

Nickel: The most-traded SHFE 2301 nickel closed up 3% or 6,050 yuan/mt at 207,750 yuan/mt, with open interest up 10,182 lots to 89,196 lots.

In the spot market, Jinchuan nickel was in premiums of 7,500-7,600 yuan/mt today, with an average of 7,550 yuan/mt, down 200 yuan/mt on a daily basis. NORNICKEL nickel was in premiums of 5,000-6,000 yuan/mt, with an average of 5,750 yuan/mt, up 350 yuan/mt from the previous trading day. SHFE-LME price spread still kept pure nickel imports in deep losses, and rebounding NORNICKEL nickel premiums weighed on the spot transactions. For nickel briquette, the prices stood between 212,000-212,800 yuan/mt, up 7,350 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.]

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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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