SMM Evening Comments (Jan 12): Shanghai Nonferrous Metals Closed Mostly with Gains amid Optimism over Chinese Economy

SHANGHAI, Jan 12 (SMM) – Shanghai nonferrous metals closed mostly with gains on optimism over China’s economic recovery with the market returning to normal following the extensive pandemic outbreak in December.

Shanghai copper gained 1.84%, aluminium rose 0.58%, lead slid 0.65%, zinc jumped 0.27%, tin grew 3.19%, and nickel fell 1.85%.

Copper: The most-traded SHFE 2303 copper closed up 1.84% or 1,240 yuan/mt at 68,660 yuan/mt, with open interest up 8,963 lots to 198,167 lots.

In the spot market, SHFE copper rose nearly 1,000 yuan/mt in day trading, and few downstream players purchased. SHFE front-month and next-month spread posted speculation opportunities, while most market players stood wait-and-see.

Aluminium: The most-traded SHFE 2302 aluminium closed up 0.58% or 105 yuan/mt at 18,340 yuan/mt, with open interest down 16,276 lots to 112,780 lots.

After the positive overseas macro factors have been digested, China released a series of favourable policies, boosting market confidence. However, poor downstream demand ahead of the upcoming CNY holiday and rapidly rising inventory will prevent aluminium prices from going up.

Lead: The most-traded SHFE 2303 lead closed down 0.65% or 100 yuan/mt at 15,370 yuan/mt, with open interest down 1,157 lots to 73,034 lots.

In the spot market, the cargo holders shipped based on market dynamics, but there were few quotes in the market approaching the delivery of SHFE 2301. The downstream players have completed pre-holiday restocking, and took holidays one after another. The market was quiet as a whole.

Zinc: The most-traded SHFE 2302 zinc closed up 0.27% or 65 yuan/mt at 23,785 yuan/mt, with open interest down 1,622 lots to 76,998 lots.

In the spot market, a number of downstream players have already been in holidays, leading to few market inquiries. The cargo holders, however, were active in making shipments and lowered their quotes.

Tin: The most-traded SHFE 2302 tin closed up 3.19% or 6,660 yuan/mt at 215,620 yuan/mt, with open interest down 1,191 lots to 42,242 lots.

In the spot market, the smelters were cautious in making quotes, while the premiums/discounts offered by the traders dropped again. But the transactions were poor due to rising SHFE tin. The downstream players still purchased on demand.

Nickel: The most-traded SHFE 2302 nickel closed down 1.85% or 3,830 yuan/mt at 203,530 yuan/mt, with open interest down 2,443 lots to 46,542 lots.

In the spot market, Jinchuan nickel was in premiums of 13,500-14,500 yuan/mt, with an average of 14,000 yuan/mt, up 750 yuan/mt from a day ago. NORNICKEL nickel was in premiums of 6,800-7,500 yuan/mt, with an average of 7,150 yuan/mt, up 200 yuan/mt. Some NORNICKEL nickel cleared the customs after LME nickel dropped significantly. The spot transactions also picked up as SHFE nickel remained low. For nickel briquette, the prices stood between 205,900-207,900 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.]