SMM Evening Comments (Dec 6): Shanghai Nonferrous Metals Closed Mixed on Comeback of Rate Hike Concerns

Published: Dec 06, 2022 18:00 (GMT+8)
Shanghai nonferrous metals closed mixed as the market was slightly pressured by the worries about the US rate hikes amid better-than-expected economic readings in the US disclosed overnight.

SHANGHAI, Dec 6 (SMM) – Shanghai nonferrous metals closed mixed as the market was slightly pressured by the worries about the US rate hikes amid better-than-expected economic readings in the US disclosed overnight.

Shanghai copper fell 0.68%, aluminium lost 0.44%, lead jumped 0.03%, zinc added 0.14%, tin advanced 2.44%, and nickel climbed 0.9%.

Copper: The most-traded SHFE 2301 copper closed down 0.68% or 450 yuan/mt at 65,770 yuan/mt, with open interest down 1,747 lots to 143,257 lots.

The spot premiums fell after opening high today, and the traders still dominated the market with the downstream players staying on the sidelines. The premiums of mainstream standard-quality copper stood at 500 yuan/mt, and the market was stable. The premiums then fell to roughly 490 yuan/mt as the market started to move rangebound.

Aluminium: The most-traded SHFE 2301 aluminium closed down 0.44% or 85 yuan/mt at 19,185 yuan/mt, with open interest down 14,524 lots to 212,997 lots.

Aluminium inventory remained low, with little possibility of large accumulation in the near future. Although the domestic pandemic controls are gradually relaxed, the downstream demand has not yet improved significantly. Trades in both aluminium ingot and billet markets were inhibited by the high aluminium prices. However, downstream demand is expected to gradually recover due to loosening pandemic controls. Therefore, aluminium prices are expected to fluctuate strongly.

Lead: The most-traded SHFE 2301 lead closed up 0.03% or 5 yuan/mt at 15,940 yuan/mt, with open interest down 3,083 lots to 85,387 lots.

The cargo holders were more willing to send their cargoes to the delivery warehouses, while the spot quotes in the market were firm though the total number of quotes was limited. The large downstream players mainly purchased in the form of long-term orders, and transactions in the spot market was muted amid limited rigid demand. The supply of lead-acid battery scrap was still tight, lifting the cost of secondary lead smelters.

Zinc: The most-traded SHFE 2301 zinc closed up 0.14% or 35 yuan/mt at 24,615 yuan/mt, with open interest down 4,344 lots to 116,666 lots.

The market was again worried about the US rate hikes amid better-than-expected economic readings in the US disclosed overnight, pressuring the base metals market. Nonetheless, SHFE zinc still gained support from low spot inventory.

Tin: The most-traded SHFE 2301 tin closed up 2.44% or 4,650 yuan/mt at 195,010 yuan/mt, with open interest down 8,052 lots to 52,279 lots.

In the spot market, the spread among quotes offered by the smelters narrowed in early trade, and some smelters frequently adjusted the quotes during day trading. The spot premiums/discounts offered by the traders were low, and the market transactions were still muted. The downstream players still purchased on rigid demand.

Nickel: The most-traded SHFE 2301 nickel closed up 0.9% or 1,840 yuan/mt at 206,700 yuan/mt, with open interest down 10,902 lots to 78,294 lots.

In the spot market, Jinchuan nickel was in premiums of 7,000-7,800 yuan/mt, with an average of 7,400 yuan/mt, down 150 yuan/mt from a day ago. NORNICKEL nickel was in premiums of 5,800-6,000 yuan/mt, with an average of 5,900 yuan/mt, up 150 yuan/mt on a daily basis. Imported pure nickel still suffered great losses, and the transactions were poor amid short supply of imported pure nickel. For nickel briquette, the prices stood at 209,700-210,600 yuan/mt, down 2,250 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.]

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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