SMM Evening Comments (Mar 30): Shanghai Nonferrous Metals Closed Mostly with Gains on Persistent Low US Dollar Index

SHANGHAI, Mar 30 (SMM) - Shanghai nonferrous metals closed mostly with gains in day trading. On the macro front, markets are pricing in a significantly higher chance of the Fed standing pat on interest rates, but US dollar index still hovers at lows. The changes on the macro front are limited provisionally.

SHFE copper rose 0.39%, aluminium gained 0.03%, lead inched higher 0.07%, zinc advanced 0.57%, tin expanded 0.36%, and nickel slumped 2.53%.

Copper: The most-traded SHFE 2305 copper closed up 0.39% or 270 yuan/mt at 69,660 yuan/mt, with open interest up 1,597 lots to 173,919 lots.

In the spot market, the deals were mostly closed at low prices by arbitragers. The price spread between front-month and next-month contracts cast a great impact on the trading. The expanded import losses will further constrain the inflows of imported copper. Most enterprises managed to destock with the approaching month-end and quarter-end.

Aluminium: The most-traded SHFE 2305 aluminium closed up 0.03% or 50 yuan/mt at 18,695 yuan/mt, with open interest down 205 lots to 219,007 lots.

On the fundamentals, despite a slight recovery on the production side, domestic aluminium ingot social inventory fell rapidly as downstream consumption continued to pick up. The short-term aluminium prices may go up, driven by improving fundamentals. However, macro uncertainty should be closely watched.

Lead: The most-traded SHFE 2305 lead closed up 0.07% or 10 yuan/mt at 15,305 yuan/mt, with open interest down 356 lots to 54,631 lots.

As SHFE lead prices hovered at lows, goods holders were not passionate about selling and some were firm to their prices. Traders intended to purchase at large discounts, but such resources available were scarce. Meanwhile, downstream enterprises only purchased as needed, leading to quiet trading in the market.

Zinc: The most-traded SHFE 2305 zinc closed up 0.57% or 130 yuan/mt at 22,855 yuan/mt, with open interest down 878 lots to 97,218 lots.

Zinc prices hovered at highs today, which discouraged downstream enterprises from buying. Traders cut their offers further but only received on-demand purchases from downstream enterprises. The trading was mediocre.

Tin: The most-traded SHFE 2305 tin closed up 0.36% or 740 yuan/mt at 207,050 yuan/mt, with open interest up 8,511 lots to 58,496 lots.

Nickel: The most-traded SHFE 2305 nickel closed down 2.53% or 4,590 yuan/mt at 176,580 yuan/mt, with open interest up 1,580 lots to 77,466 lots.

In the spot market, Jinchuan nickel was quoted in premiums of 5,500-5,800 yuan/mt, with an average of 5,650 yuan/mt, up 500 yuan/mt from the previous trading day. NORNICKEL nickel was in premiums of 2,500-2,700 yuan/mt, with an average of 2,600 yuan/mt, down 100 yuan/mt from the prior trading day. SHFE nickel prices pulled back after surging high in the morning sessision, and the spot premiums remained low amid thin trades. For nickel briquette, the prices stood between 180,200-181,000 yuan/mt, down 5,100 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.]