SMM Evening Comments (Dec 8): Shanghai Nonferrous Metals Closed Mixed

SHANGHAI, Dec 8 (SMM) – Shanghai nonferrous metals closed mixed in day trading. On the macro front, China has asked for more effective, prudent and active fiscal policy, as well as more precise and powerful monetary policy in an effort to boost investor confidence.

Shanghai copper rose 0.76%, aluminium lost 0.1%, lead slid 0.44%, zinc added 0.26%, tin lost 0.37%, and nickel climbed 4.68%.

Copper: The most-traded SHFE 2301 copper closed up 0.76% or 500 yuan/mt at 66,360 yuan/mt, with open interest down 1,685 lots to 144,893 lots.

On the macro front, China has asked for more effective, prudent and active fiscal policy, as well as more precise and powerful monetary policy in an effort to boost investor confidence.

In the spot market, the spot premiums have dropped below 100 yuan/mt, and some cargoes were even quoted with discounts. But few sellers followed the trend based on SMM observation. Approaching the end of the year, rising risk control as well as the active selling are the major contradiction in the market at present.

Aluminium: The most-traded SHFE 2301 aluminium closed down 0.1% or 20 yuan/mt at 19,235 yuan/mt, with open interest down 3,229 lots to 207,918 lots.

On the whole, aluminium price has been high recently. On the demand side, the spot market showed little demand for spot aluminium ingot and billet. The conversion margins of aluminium billet have fallen to discounts, while the spot premiums of aluminium ingot also kept falling and diverged among regions. In Gongyi, the premiums fell due to falling terminal demand and orders. On the supply side, the aluminium smelters increased the proportion of aluminium ingots. Though the market is currently supported by the sentiment front, the changes of aluminium ingot social inventory and prices are worth attention.

Lead: The most-traded SHFE 2301 lead closed down 0.44% or 70 yuan/mt at 15,730 yuan/mt, with open interest down 2,822 lots to 71,166 lots.

The cargo holders mainly planned to send their cargoes to the delivery warehouses, and the number of quotes in the spot market dropped significantly. Meanwhile, secondary lead was sold with large discounts, attracting downstream buyers. The transactions in the refined lead market was muted. However, the supply of secondary lead is expected to tighten with a number of smelters reducing or suspending the production. Short-term SHFE lead is expected to move rangebound amid a relatively stable macro front.

Zinc: The most-traded SHFE 2301 zinc closed up 0.26% or 65 yuan/mt at 24,830 yuan/mt, with open interest up 1,131 lots to 119,526 lots.

SHFE moved rangebound today and touched a near-time high with support from the macro front and low inventory. However, the consumption side has not yet recovered as expected, while the overseas consumption remained poor. On the whole, SHFE zinc lacked upside momentum.

Tin: The most-traded SHFE 2301 tin closed down 0.37% or 720 yuan/mt at 196,430 yuan/mt, with open interest down 8,755 lots to 47,755 lots.

In the spot market, the spread among quotes offered by the smelters changed little, and some smelters were more willing to sell and lowered their offers. The premiums/discounts offered by the traders were stable in early trade, and most transactions were made with discounts. The spot market was again quiet amid high prices, while the downstream players still purchased on rigid demand.

Nickel: The most-traded SHFE 2301 nickel closed up 4.68% or 9,780 yuan/mt at 218,810 yuan/mt, with open interest up 8,428 lots to 92,162 lots.

In the spot market, Jinchuan nickel was in premiums of 7,500-8,000 yuan/mt, with an average of 7,750 yuan/mt, flat from a day ago. NORNICKEL nickel was in premiums of 5,800-6,000 yuan/mt, with an average of 5,900 yuan/mt, also flat. Imported pure nickel was in deep losses at present, while domestic social inventory that hit new low again recently underpinned SHFE nickel. Though the spot premiums were flat today, and absolute spot prices were high, which weighed on the market transactions. For nickel briquette, the prices stood between 219,800-221,200 yuan/mt, up 7,800 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.]