SMM Evening Comments (Jan 13): Shanghai Nonferrous Metals Closed Mostly with Gains on Subsiding Rate Hike Expectations

Published: Jan 13, 2023 18:00
On the macro front, the unadjusted US December CPI annual rate recorded 6.5%, which is in line with expectations, reinforcing the expectations that the Fed will slow rate hikes. In this case, the US dollar index hit nearly six-month low, underpinning metals prices.

SHANGHAI, Jan 13 (SMM) – Shanghai nonferrous metals closed mostly with gains in day trading. On the macro front, the unadjusted US December CPI annual rate recorded 6.5%, which is in line with expectations, reinforcing the expectations that the Fed will slow rate hikes. In this case, the US dollar index hit nearly six-month low, underpinning metals prices.

Shanghai copper edged down 0.04%, aluminium rose 1.06%, lead slid 0.81%, zinc jumped 1.28%, tin grew 3.28%, and nickel advanced 1.77%.

Copper: The most-traded SHFE 2303 copper closed down 0.04% or 30 yuan/mt at 68,630 yuan/mt, with open interest up 3,123 lots to 201,290 lots.

In the spot market, there were few market players engaging in spot transactions as the Chinese New Year is only a week away. While SHFE 2301 and 2302 spread remained at 200 yuan/mt, there still existed opportunities for transactions.

Aluminium: The most-traded SHFE 2302 aluminium closed up 1.06% or 195 yuan/mt at 18,515 yuan/mt, with open interest down 9,729 lots to 103,051 lots.

Overseas macro data was positive recently, and China released a series of favourable policies, boosting market confidence. However, due to poor downstream demand ahead of the upcoming CNY holiday and rapidly rising inventory, aluminium prices will be capped.

Lead: The most-traded SHFE 2303 lead closed down 0.81% or 125 yuan/mt at 15,255 yuan/mt, with open interest up 3,702 lots to 76,736 lots.

The premiums/discounts in the spot market changed little, while the market inquiries were scarce with downstream players taking holiday soon. Coupled with the soon-to-halt logistics services, the spot market was even quieter.

Zinc: The most-traded SHFE 2302 zinc closed up 1.28% or 305 yuan/mt at 24,155 yuan/mt, with open interest down 5,616 lots to 71,382 lots.

The market transactions were muted today with few quotes heard in the market. The downstream inquiries were also inactive with downstream players starting to take holidays. The market turned even colder as the traders halted for holiday as well.

Tin: The most-traded SHFE 2302 tin closed up 3.28% or 7,040 yuan/mt at 221,880 yuan/mt, with open interest down 3,181 lots to 39,061 lots.

In the spot market, the market players were strongly wait-and-see after SHFE tin rose rapidly. And the market transactions were muted as some traders and downstream players were closed for holiday. SHFE warrants inventory added 164 mt to 6,252 mt today.

Nickel: The most-traded SHFE 2302 nickel closed up 1.77% or 3,620 yuan/mt at 208,370 yuan/mt, with open interest down 9,291 lots to 37,251 lots.

In the spot market, Jinchuan nickel was in premiums of 14,000 yuan/mt, flat from a day ago. NORNICKEL nickel was in premiums of 7,000-7,300 yuan/mt, with an average of 7,150 yuan/mt, flat. Spot premiums were little changed approaching the Chinese New Year even though SHFE nickel rebounded, and the spot transactions were subsided. For nickel briquette, the prices stood between 212,600-213,400 yuan/mt, up 6,100 yuan/mt on a daily basis.

[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.]

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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