SHANGHAI, Jan 9 (SMM) – Shanghai nonferrous metals closed mixed. On the macro front, US non-farm payrolls added 223,000 in December, which slightly beat the expectations, and the unemployment rate stood at 3.5%, lower than the previous reading. After the prints, US dollar index fell from 105 to 103. In China, the government further introduced stimulus policies targeting the consumption. But the market in China quietened approaching the Chinese New Year.
Shanghai copper gained 1.54%, aluminium rose 0.48%, lead slid 0.45%, zinc added 1.18%, tin dropped 0.17%, and nickel declined 0.25%.
Copper: The most-traded SHFE 2303 copper closed up 1.54 % or 1,000 yuan/mt at 66,090 yuan/mt, with open interest up 13,061 lots to 159,235 lots.
In the spot market, the spot premiums fell today, and stopped falling around the flat level. The market transactions weakened compared with a week ago.
Aluminium: The most-traded SHFE 2302 aluminium closed up 0.48% or 85 yuan/mt at 17,950 yuan/mt, with open interest down 7,194 lots to 164,277 lots.
The current macro impact on aluminium prices is limited. The drastic drop in aluminium prices last week was mainly due to poor fundamentals and sharp increase in social inventory. Aluminium prices are now close to smelters’ costs. According to SMM data, the average cost of aluminium smelters stood at around 17,800 yuan/mt. It remains to be seen whether aluminium prices will find cost support.
Lead: The most-traded SHFE 2302 lead closed down 0.45% or 70 yuan/mt at 15,595 yuan/mt, with open interest down 6,369 lots to 45,874 lots.
In the spot market, some cargo holders intended to clear their inventory before the Chinese New Year, and still quoted with discounts; while some did not make quotes and planned to deliver the SHFE 2301 contract instead. The market inquiries were muted with lead-acid battery companies closed for Chinese New Year, and the pre-holiday restocking is also about to end. SMM lead ingot social inventory across five markets in China added 4,700 mt from last Friday, and is likely to rise in the follow-up period.
Zinc: The most-traded SHFE 2302 zinc closed up 1.18% or 275 yuan/mt at 23,515 yuan/mt, with open interest down 3,897 lots to 83,554 lots.
US dollar dropped with market expectations on US Fed slowing rate hike in the future. SHFE zinc was boosted by the bulls on the macro front.
Tin: The most-traded SHFE 2302 tin closed down 0.17% or 350 yuan/mt at 205,020 yuan/mt, with open interest down 10,151 lots to 43,520 lots.
In the spot market, the quotes offered by the smelters diverged; some were firm to their prices; while those who were willing to sell lowered their offers. The premiums/discounts offered by the smelters stood stable, and slightly falling SHFE tin price boosted the market transactions, but the overall transactions were less than last week. Downstream players purchased on rigid demand.
Nickel: The most-traded SHFE 2302 nickel closed down 0.25% or 530 yuan/mt at 212,110 yuan/mt, with open interest down 7,374 lots to 54,319 lots.
Jinchuan nickel was in premiums of 10,000-13,000 yuan/mt, with an average of 11,500 yuan/mt, up 1,500 yuan/mt from a day ago. NORNICKEL nickel was in premiums of 6,800-7,000 yuan/mt, with an average of 6,900 yuan/mt, up 250 yuan/mt on a daily basis. SHFE nickel was stable, and the transactions weakened as both upstream and downstream players have completed pre-holiday restocking. In addition, halting logistics services ahead of the holiday have also weighed on the selling interest of traders. For nickel briquette, the prices stood between 216,000-217,800 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.]