SMM Evening Comments (Jan 11): Shanghai Nonferrous Metals Closed Mostly with Gains on Support Policies

SHANGHAI, Jan 11 (SMM) – Shanghai nonferrous metals closed mostly with gains today. On Tuesday night, the Federal Reserve Committee Chairman Powell reiterated the need to fight inflation, and said in order to restore price stability, it is necessary to take "unpopular measures". The U.S. index was still running low.

The central bank of China and the CBIRC jointly held a forum on the credit work of major banks on January 10, and proposed that major banks should further optimise the credit structure and promote a smooth transition to a new development model for the real estate industry.

Shanghai copper gained 2.19%, aluminium rose 0.55%, lead slid 1.38%, zinc fell 0.48%, tin jumped 3.96%, and nickel advanced 1.12%.

Copper: The most-traded SHFE 2303 copper closed up 2.19% or 1,460 yuan/mt at 68,000 yuan/mt, with open interest up 19,452 lots to 189,204 lots.

In the spot market, strongly rising SHFE copper did not cast a strong impact on the spot market, and the spot premiums were still around the flat level, which dropped to the negative zone occasionally in day trading.

Aluminium: The most-traded SHFE 2302 aluminium closed up 0.55% or 100 yuan/mt at 18,245 yuan/mt, with open interest down 20,624 lots to 129,055 lots.

Bullish macro factors overseas contributed to the price rally, with market focus on US interest rate decision this Thursday. Aluminium ingot and billet inventory continued to accumulate as demand declined with the Chinese New Year drawing close. It is expected that SHFE aluminium will move rangebound in the short term.

Lead: The most-traded SHFE 2303 lead closed down 1.38% or 215 yuan/mt at 15,375 yuan/mt, with open interest up 347 lots to 74,191 lots.

In the spot market, the offers from the traders were firm though they were not active in making shipment. The sources circulating in the market were scarce ahead of the delivery of SHFE 2301. The downstream players restocked on dips as the logistics services are about to halt and the players will take holiday soon. The spot market was quiet.

Zinc: The most-traded SHFE 2302 zinc closed down 0.48% or 115 yuan/mt at 23,670 yuan/mt, with open interest down 4,256 lots to 78,620 lots.

SHFE zinc was relatively resilient recently with support from real estate, but was contained by falling demand.

Tin: The most-traded SHFE 2302 tin closed up 3.96% or 8,130 yuan/mt at 213,380 yuan/mt, with open interest down 2,614 lots to 43,433 lots.

In the spot market, the downstream players’ demand was contained by steeply rising SHFE tin price, hence the spot market was muted. SHFE warrants inventory fell 21 mt to 5,226 mt today.

Nickel: The most-traded SHFE 2302 nickel closed up 1.12% or 2,330 yuan/mt at 209,530 yuan/mt, with open interest down 4,859 lots to 48,985 lots.

In the spot market, Jinchuan nickel was in premiums of 12,000-14,500 yuan/mt, with an average of 13,250 yuan/mt, down 500 yuan/mt on a daily basis. NORNICKEL nickel was in premiums of 6,600-7,300 yuan/mt, with an average of 6,950 yuan/mt, down 150 yuan/mt from the previous trading day. The transactions were subsided with weak supply and demand of pure nickel ahead of Chinese New Year. For nickel briquette, the prices stood between 210,800-212,500 yuan/mt, up 650 yuan/mt from a day ago.

[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.]