SMM Evening Comments (Mar 29): Shanghai Nonferrous Metals Closed Mostly with Gains amid Weaker Economic Growth Forecast from World Bank

SHANGHAI, Mar 29 (SMM) - Shanghai nonferrous metals closed mostly with gains in day trading. On the macro front, Fed official Bradley made hawkish remarks overnight, but the market only responded mildly, and the dollar index continued to weaken. The World Bank announcement showed that the potential momentum for global economic growth has been gradually reduced.

SHFE copper lost 0.22%, aluminium gained 0.38%, lead dropped 1.04%, zinc advanced 0.53%, tin expanded 0.71%, and nickel rose 0.79%.

Copper: The most-traded SHFE 2305 copper closed down 0.22% or 150 yuan/mt at 69,280 yuan/mt, with open interest up 999 lots to 172,322 lots.

In the spot market, the contango stabilised at 90 yuan/mt, weighing on the spot premiums. Downstream buyers purchased on rigid demand amid high copper prices, and arbitrage traders were active.

Aluminium: The most-traded SHFE 2305 aluminium closed up 0.38% or 70 yuan/mt at 18,690 yuan/mt, with open interest up 77 lots to 219,211 lots.

On the fundamentals, although the supply has slightly improved, the continuous recovery of the downstream consumption led to the rapid destocking of social inventories, giving support to aluminium prices. In the short term, aluminium prices may fluctuate strongly under the support of fundamentals, though disturbance on the macro front shall not be overlooked.

Lead: The most-traded SHFE 2305 lead closed down 1.04% or 160 yuan/mt at 15,260 yuan/mt, with open interest down 10,957lots to 54,987 lots.

As SHFE lead prices dropped, goods holders also refrained from selling, and spot discounts narrowed slightly. On the contrary, there was a steady stream of inquiries from traders who were willing to purchase on dips. Lead smelters sold with premiums, and downstream buyers either sood on the sidelines or purchase only as needed. The trading improved in the spot market. The most active SHFE lead contract is expected to fluctuate still with stable macro sentiment.

Zinc: The most-traded SHFE 2305 zinc closed up 0.53% or 120 yuan/mt at 22,735 yuan/mt, with open interest down 2,320 lots to 98,096 lots.

Zinc prices hovered at highs today, which discouraged downstream enterprises from buying. The subdued transactions dampened the selling enthusiasm of traders, who held their offers flat.  

Tin: The most-traded SHFE 2304 tin closed up 0.71% or 1,450 yuan/mt at 205,980 yuan/mt, with open interest down 8,108 lots to 22,927 lots.

Nickel: The most-traded SHFE 2305 nickel closed up 0.79% or 1,400 yuan/mt at 179,550 yuan/mt, with open interest up 3,950 lots to 75,886 lots.

In the spot market, Jinchuan nickel was quoted in premiums of 5,000-5,300 yuan/mt, with an average of 5,150 yuan/mt, down 1,300 yuan/mt from the previous trading day. NORNICKEL nickel was in premiums of 2,500-2,900 yuan/mt, with an average of 2,700 yuan/mt, down 50 yuan/mt from the prior trading day. The spot premiums declined sharply on the approaching delivery of the front-month contract, while SHFE nickel prices continued to rally. For nickel briquette, the prices stood between 185,300-186,100 yuan/mt, up 2,700 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.]