SMM Evening Comments (Mar 7): Shanghai Nonferrous Metals Closed Mixed as Market Awaits Powell Comment

SHANGHAI, Mar 7 (SMM) – Shanghai nonferrous metals closed mixed in day trading. On the macro front, Fed Chairman Powell's upcoming speech is of great concern to the market. If his stance tilts towards hawkish again, the market expectations for Fed's 50bp rate hike in March will be bolstered, and US dollar may continue to strengthen. The market players are now waiting for more macro data to be released.

SHFE copper gained 0.10%, aluminium slid 0.27%, lead edged up 0.03%, zinc added 0.47%, tin shed 0.24%, and nickel lost 0.36%.

Copper: The most-traded SHFE 2304 copper closed up 0.10 % or 70 yuan/mt at 69,590 yuan/mt, with open interest up 1,734 lots to 147,482 lots.

In the spot market, the spot premiums dropped after opening high, and then rebounded, while the spot transactions picked up after staying sluggish. Sources available in the spot market were mostly with next-month invoices, and prices of cargoes with front-month and next-month invoices showed a spread of 20-30 yuan/mt. 

Aluminium: The most-traded SHFE 2304 aluminium closed down 0.27% or 50 yuan/mt at 18,610 yuan/mt, with open interest down 2,993 lots to 190,128 lots.

After aluminium smelters in Yunnan complete production cuts, the market attention will focus more on the recovery of domestic consumption. It remains to be seen when the seasonal destocking will begin.

Lead: The most-traded SHFE 2304 lead closed up 0.03% or 5 yuan/mt at 15,285 yuan/mt, with open interest up 144 lots to 61,217 lots.

SHFE lead consolidated today, and the cargo holders quoted based on market dynamics. The secondary lead smelters were not passionate about selling, leading to limited supplies in the spot market. Downstream enterprises mainly purchased as needed, and spot trades were stable. 

Zinc: The most-traded SHFE 2304 zinc closed up 0.47% or 110 yuan/mt at 23,480 yuan/mt, with open interest up 1,416 lots to 83,850 lots.

As zinc prices inched higher, the transactions were mainly closed between traders, and cargoes under long-term orders were delivered. Downstream players basically stood on the sidelines, and the transactions thinned.

Tin: The most-traded SHFE 2304 tin closed down 0.24% or 470 yuan/mt at 199,030 yuan/mt, with open interest down 5,192 lots to 63,510 lots.

In the spot market, the quotes of smelters still diverged amid low tin futures prices. Some smelters held the prices firm, while some traders were more active in making quotes. The spot prices of various refined tin brands were flat. The inquiries were few today, and the transactions remained sluggish.

Nickel: The most-traded SHFE 2304 nickel closed down 0.36% or 680 yuan/mt at 188,780 yuan/mt, with open interest down 1,394 lots to 74,471 lots.

In the spot market, Jinchuan nickel was quoted in premiums of 8,200-8,500 yuan/mt, with an average of 8,350 yuan/mt, up 100 yuan/mt on a daily basis. NORNICKEL nickel was in premiums of 3,500-3,800 yuan/mt, with an average of 3,650 yuan/mt, down 400 yuan/mt. SHFE nickel bottomed out today. Premiums of NORNICKEL nickel kept falling while those of Jinchuan nickel rallied. Spot transactions weakened as spot prices rose. For nickel briquette, the prices stood between 193,300-194,500 yuan/mt, up 2,100 yuan/mt from the previous trading day. 

[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.]