SMM Evening Comments (Mar 15): Shanghai Nonferrous Metals Closed with Losses on Strong Risk Aversion Sentiment amid Credit Suisse Collapse

SHANGHAI, Mar 15 (SMM) - Shanghai nonferrous metals closed with losses in day trading. On the macro front, various risk events recently have triggered market panic, including the slump of Credit Suisse shares that caused a collapse in euro. The market players, out of risk aversion sentiment, turned to invest in gold or dollar. The dollar index soared above 105 yesterday, weighing on the prices of commodities and precipitated a sharper decline in crude oil prices.  

SHFE copper declined 3.45%, aluminium lost 1.20%, lead sank 0.10%, zinc fell 3.41%, tin tumbled 4.79%, and nickel shed 2.3%.

Copper: The most-traded SHFE 2304 copper closed down 3.45% or 2,370 yuan/mt at 66,420 yuan/mt, with open interest down 6,924 lots to 132,201 lots.

In the spot market, most traders took a wait-and-see stance when front-month contract was delivered today. Goods holders mainly quoted flat against the next-month contract. The appreciation of RMB contributed to a slight recovery of copper import losses.

Aluminium: The most-traded SHFE 2304 aluminium closed down 1.20% or 220 yuan/mt at 18,135 yuan/mt, with open interest down 5,971 lots to 176,716 lots.

In recent days, the bankruptcy of Silicon Valley Bank and the credit turmoil of Credit Suisse Bank have increased market concerns about global liquidity issues and systemic risks. Surging risk aversion caused hammered commodity market. The fundamentals of aluminium market have not changed much. The demand is gradually recovering.

Lead: The most-traded SHFE 2304 lead closed down 0.10% or 15 yuan/mt at 15,245 yuan/mt, with open interest down 4,934 lots to 51,269 lots.

After the SHFE 2303 lead contract was delivered, the cargoes available in the spot market was scarce. Quotes of goods holders declined from a day ago. Primary and secondary lead smelters focused on the delivery of long-term contracts, while downstream enterprises only purchased as needed. The transactions in the spot market became fewer.

Zinc: The most-traded SHFE 2304 zinc closed down 3.41% or 780 yuan/mt at 22,095 yuan/mt, with open interest down 767 lots to 81739 lots.

As zinc prices hovered at lows today, the spot discounts narrowed, which promoted some downstream buyers to restock on dips. The transactions improved slightly as a result.

Tin: The most-traded SHFE 2304 tin closed down 4.79% or 8,960 yuan/mt at 178,140 yuan/mt, with open interest down 797 lots to 67,238 lots.

Tin futures prices moved sideways at low levels, so few smelters offered quotes in the morning session, and most smelters held prices firm. Despite the rising inquiries, traders were still bearish on the prices.

Nickel: The most-traded SHFE 2304 nickel closed down 2.3% or 4,090 yuan/mt at 173,890 yuan/mt, with open interest up 922 lots to 69,047 lots.

In the spot market, Jinchuan nickel was quoted in premiums of 7,400-7,500 yuan/mt, with an average of 7,450 yuan/mt, up 200 yuan/mt from the previous trading day. NORNICKEL nickel was in premiums of 2,500-2,800 yuan/mt, with an average of 2,650 yuan/mt, up 200 yuan/mt. The spot prices extended the weakness, but the demand was also slack, resulting in thin transactions. For nickel briquette, the prices stood between 175,200-175,600 yuan/mt, down 5,100 yuan/mt from the previous trading day.