SMM Evening Comments (Mar 21): Shanghai Nonferrous Metals Closed Mixed on Upcoming Fed’s Rate Result

SHANGHAI, Mar 21 (SMM) - Shanghai nonferrous metals closed mixed in day trading. On the macro front, the US dollar index fell overnight. The market continued to digest the shock and panic brought about by the banking meltdown in Europe and the US. The market awaited the US Fed's rate results.

SHFE copper rose 0.78%, aluminium dipped 0.11%, lead gained 0.06%, zinc fell 0.51%, tin dropped 0.03%, nickel lost 2.49%.

Copper: SHFE 2305 copper closed up 520 yuan/mt or 0.78% at 67,530 yuan/mt. The open interest rose 4,744 lots to 153,584 lots.

The intraday spot prices trended lower, and the traders mainly purchased on dips. The traded prices declined with some holders frequently reducing spot premiums. Mainstream standard-quality copper was quoted at premiums of 10 yuan/mt, and premiums of high-quality copper stood at 30 yuan/mt. Hydro-copper such as ESOX and BMK was quoted at discounts of 40-20 yuan/mt, and spot discounts of non-registered brands were about 70 yuan/mt, attracting market inquiries. Near 11:00 a.m., holders raised their premiums one after another.

Aluminium: SHFE 2304 aluminium closed at 18,150 yuan/mt, down 20 yuan/mt or 0.11%. The open interest stood at 119,109 lots, down 25,265 lots.

On the macro level, the liquidity crisis brought about by overseas banks has not been alleviated. There are many macro uncertainties, triggering strong risk aversion sentiment. On the fundamentals, the domestic supply side has recovered slightly. The improvement in downstream consumption has driven the rapid destocking of aluminium ingot stocks. The fundamentals are well supported. The short-term aluminium prices will trade rangebound amid macro uncertainty.

Lead: SHFE 2304 lead closed at 15,395 yuan/mt, up 10 yuan/mt or 0.06%. The open interest was 29,895 lots, down 7,145 lots.

Supply tightness of spots was eased somewhat. The downstream companies were not active in restocking. Some purchased long-term orders, thus the transactions of small orders were relatively slack. The most-traded SHFE lead contract will move rangebound in the short term on a stable macro front.

Zinc: SHFE 2304 zinc closed at 22,450 yuan/mt, down 115 yuan/mt or 0.51%. The open interest stood at 56,247 lots, down 6,641 lots.

Zinc prices remained volatile today. Traders were more cautious in quoting. A strong wait-and-see sentiment filled the market, and some traders were still bearish on the prices. Downstream companies mainly purchased on rigid demand, resulting in a slack spot market. #1 zinc ingots were traded at around 22,340-22,390 yuan/mt.

Tin: SHFE 2304 tin closed down 50 yuan/mt or 0.03% at 184,890 yuan/mt. The open interest was 50,296 lots, down 3.079 lots.

Spot transactions were slack on rising prices, while some traders were more willing to restock. The discounts of small brands maintained large. The supply of imported tin was high.

Nickel: SHFE 2304 nickel closed at 173,510 yuan/mt, down 4,430 yuan/mt or 2.49%. The open interest stood at 57,457 lots, down 2,559 lots.

On March 21, premiums of Jinchuan nickel were 7,500-7,800 yuan/mt. The average premium stood at 7,650 yuan/mt, down 100 yuan/mt from the previous trading day. Premiums of NORNICKEL nickel stood at 2,800-2,900 yuan/mt. The average premium was 2,850 yuan/mt, an increase of 150 yuan/mt from the previous trading day. Spot nickel trading remained sluggish on the slight rise in premiums. In terms of nickel briquette, the prices were 175,000-175,700 yuan/mt, an increase of 1,500 yuan/mt from the previous trading day. The transactions of nickel briquette were slack as it was still traded at premiums over nickel sulphate.

[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.]