SMM Evening Comments (Dec 12): Shanghai Nonferrous Metals Closed with Losses ahead of US Rate Meeting

SHANGHAI, Dec 12 (SMM) – Shanghai nonferrous metals closed mostly with losses and the market awaited the result of US Fed’s rate meeting in December.

Shanghai copper fell 1.15%, aluminium dropped 2.32%, lead slid 1.52%, zinc lost 0.7%, tin shed 3.67%, and nickel declined 1.16%.

Copper: The most-traded SHFE 2301 copper closed down 1.15% or 770 yuan/mt at 66,030 yuan/mt, with open interest down 5,624 lots to 142,968 lots.

In the spot market, SHFE zinc fell nearly 1% today, while the downstream players still stood on the sidelines for better opportunities. The premiums of standard-quality copper stood at 70-100 yuan/mt in early trade, and then fell to 50-70 yuan/mt in morning trade, and even 30-50 yuan/mt as some traders wished to clinch a deal.

Aluminium: The most-traded SHFE 2301 aluminium closed down 2.32% or 445 yuan/mt at 18,775 yuan/mt, with open interest down 30,432 lots to 173,131 lots.

SHFE aluminium fell below 19,000 yuan/mt and tried to establish support at 18,750 yuan/mt. The spot market was relatively quiet today, and the buyers mainly stood wait-and-see apart from purchasing on rigid demand. SHFE aluminium is expected to remain rangebound recently.

Lead: The most-traded SHFE 2301 lead closed down 1.52% or 240 yuan/mt at 15,540 yuan/mt, with open interest down 1,092 lots to 67,523 lots.

There were few spot quotes heard in the market, and the downstream players mainly purchased on demand, while some intended to buy the dip. Nonetheless, the actual transactions were muted. SHFE lead is likely to remain stable with occasional drops should there be no significant events on the macro front.

Zinc: The most-traded SHFE 2301 zinc closed down 0.7% or 175 yuan/mt at 24,670 yuan/mt, with open interest down 5,495 lots to 114,183 lots.

Though the pandemic control measures have relaxed substantially, the aftermath of the pandemic lingered. As the longs paid off, the downstream consumption weakened coupled with the arrival of the seasonal in the galvanising sector. SHFE zinc, however, still gained support from low social inventory.

Tin: The most-traded SHFE 2301 tin closed down 3.67% or 7,260 yuan/mt at 190,400 yuan/mt, with open interest up 2,061 lots to 55,981 lots.

In the spot market, the smelters generally retained the interest in making quotes apart from some who held the prices firm and refrained from quoting. The premiums/discounts offered by the traders rebounded in early trade, and the transactions in the spot market picked up palpably. The elastic demand was released after SHFE tin fell today.

Nickel: The most-traded SHFE 2301 nickel closed down 1.16% or 2,560 yuan/mt at 218,040 yuan/mt, with open interest down 7,437 lots to 81,458 lots.

In the spot market, Jinchuan nickel was in premiums of 7,500-7,800 yuan/mt, with an average of 7,650 yuan/mt, up 200 yuan/mt on a daily basis. NORNICKEL nickel was in premiums of 5,500-6,000 yuan/mt, with an average of 5,750 yuan/mt, down 100 yuan/mt from the previous trading day. The spot premiums fell slightly as SHFE nickel dropped. For nickel briquette, the prices stood between 219,800-220,400 yuan/mt, down 300 yuan/mt from the last 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.]