SMM Evening Comments (Mar 9): Shanghai Nonferrous Metals Closed Mostly with Losses on Stronger ADP Data

SHANGHAI, Mar 9 (SMM) - Shanghai nonferrous metals closed mostly with losses in day trading. On the macro front, private payrolls increased by 242,000 in February, stronger than the expectation of 200,000, according to the latest ADP readings. The still intense employment market in the United States suggested that the interest rate may need to be raised further. The probability of the Fed raising interest rates by 50 basis points to a range of 5.00%-5.25% in March rose to 77.9%.

SHFE copper added 0.49 %, aluminium slid 0.08%, lead edged down 0.03%, zinc declined 0.37%, tin shed 2.65%, and nickel lost 0.66%.

Copper: The most-traded SHFE 2304 copper closed up 0.49 % or 340 yuan/mt at 69,290 yuan/mt, with open interest down 1,762 lots to 144,010 lots.

In the spot market, goods holders held prices firm with the approaching delivery of front-month contract. This, coupled with a recovery in downstream demand, stimulated a slow increase in spot premiums.

Aluminium: The most-traded SHFE 2304 aluminium closed down 0.08% or 15 yuan/mt at 18,495 yuan/mt, with open interest down 1,836 lots to 186,025 lots.

After aluminium smelters in Yunnan have completed production cuts, the market attention will focus more on the recovery of domestic consumption and overseas interest rate hikes. Given the high social inventory, aluminium prices will hover sideways before the US Fed announces its interest rate decision.  

Lead: The most-traded SHFE 2304 lead closed down 0.03% or 5 yuan/mt at 15,180 yuan/mt, with open interest up 3,694 lots to 67,179 lots.

SHFE lead hovered at lows today, and the cargo holders adjusted their offers based on market dynamics. Given the tight supply of secondary lead in the spot market, downstream enterprises preferred purchasing primary lead on rigid demand. The spot trades were brisk, and the most active SHFE lead contract is expected to remain rangebound. 

Zinc: The most-traded SHFE 2304 zinc closed down 0.37% or 85 yuan/mt at 23,185 yuan/mt, with open interest down 226 lots to 82,166 lots.

Zinc prices fluctuated still today, and downstream buyers in north China were not enthusiastic about picking up cargoes due to local production restriction for environmental protection. The transactions were moderate.

Tin: The most-traded SHFE 2304 tin closed down 2.65% or 5,260 yuan/mt at 192,910 yuan/mt, with open interest up 5,321 lots to 72,056 lots.

In the spot market, the quotes of most smelters were with slight premiums, and some smelters declined to compromise on their prices. The transactions were sluggish again with rare inquiries.

Nickel: The most-traded SHFE 2304 nickel closed down 0.66% or 1,240 yuan/mt at 186,510 yuan/mt, with open interest down 9,577 lots to 70,346 lots.

In the spot market, Jinchuan nickel was quoted in premiums of 6,000-8,200 yuan/mt, with an average of 7,100 yuan/mt, down 650 yuan/mt on a daily basis. NORNICKEL nickel was in premiums of 2,800-3,000 yuan/mt, with an average of 2,900 yuan/mt, down 500 yuan/mt. SHFE nickel still weakened, and pure nickel spot prices continued to go down. Downstream enterprises mainly purchased as needed. For nickel briquette, the prices stood between 189,700-190,400 yuan/mt, down 1,050 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.]