SMM Evening Comments (Feb 17): Shanghai Nonferrous Metals Closed Mostly with Gains while Strong US Dollar Weighed on

Published: Feb 17, 2023 18:00 (GMT+8)

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The United States announced the initial jobless claims for the week ending February 11 at 194,000, lower than the expected 200,000. The January PPI annual rate recorded 6%, beating expectations.

SHANGHAI, Feb 17 (SMM) – Shanghai nonferrous metals closed mostly with gains today. The United States announced the initial jobless claims for the week ending February 11 at 194,000, lower than the expected 200,000. The January PPI annual rate recorded 6%, beating expectations. Market players thus started to worry the follow-up rate hike path. Overnight US dollar index touched a high of 104, and maintained momentum in day trading.

SHFE copper added 0.91%, aluminium rose 0.76%, lead edged down 0.03%, zinc gained 0.4%, tin inched up 0.07%, and nickel slid 0.49%.

Copper: The most-traded SHFE 2303 copper closed up 0.91% or 620 yuan/mt at 68,880 yuan/mt, with open interest down 4,165 lots to 131,996 lots.

The spot transactions changed little compared with yesterday, but more downstream players stood wait-and-see amid rising SHFE copper.

Aluminium: The most-traded SHFE 2303 aluminium closed up 0.76% or 140 yuan/mt at 18,530 yuan/mt, with open interest down 16,952 lots to 153,584 lots.

After the decline in aluminium inventory when compared to Monday February 13 and the steady increase in downstream operating rates this week, there are signs of stabilisation in the fundamentals. Market attention will be focused on how strong demand recovery will be. It is expected that aluminium prices will remain rangebound in the short term.

Lead: The most-traded SHFE 2303 lead closed down 0.03% or 5 yuan/mt at 15,170 yuan/mt, with open interest down 1,879 lots to 59,571 lots.

The traders made offers based on the market dynamics, and the discounts generally narrowed compared with a day ago, and some turned into premiums. Downstream inquiries picked up palpably, and favoured primary lead as second lead prices were higher than primary lead.

Zinc: The most-traded SHFE 2303 zinc closed up 0.4% or 90 yuan/mt at 22,865 yuan/mt, with open interest down 4,484 lots to 74,609 lots.

Market transactions were muted as zinc price rose today, and downstream players purchased on rigid demand, while the traders were more active.

Tin: The most-traded SHFE 2303 tin closed up 0.07% or 140 yuan/mt at 212,320 yuan/mt, with open interest down 1,806 lots to 45,374 lots.

The spot prices changed little compared with yesterday, and discounts of small brands narrowed slightly. Overall sales of traders weakened. SHFE warrants inventory added 56 mt to 8,344 mt.

Nickel: The most-traded SHFE 2303 nickel closed down 0.49% or 1,010 yuan/mt at 203,100 yuan/mt, with open interest up 1,449 lots to 59,047 lots.

In the spot market, Jinchuan nickel was in premiums of 7,500-8,000 yuan/mt, with an average of 7,750 yuan/mt, down 150 yuan/mt from a day ago. NORNICKEL nickel was in premiums of 4,800-5,500 yuan/mt, down 250 yuan/mt. The spot premiums dropped slightly as SHFE nickel once rebounded, but the absolute prices of pure nickel rose, weighing on the transactions. For nickel briquette, the prices stood between 208,800-209,300 yuan/mt, up 1,250 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.]

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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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