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SMM Evening Comments (May 26): Shanghai Nonferrous Metals Closed with Gains on Eased Market Stress

iconMay 26, 2023 18:00
Shanghai nonferrous metals closed with gains in day trading. 

SHANGHAI, May 26 (SMM) - Shanghai nonferrous metals closed with gains in day trading. Substantial progress had been made on the US debt ceiling issue last night, and the market sentiment eased. Nonferrous metals generally rose today.

SHFE copper surged 2.17%, aluminium soared 3.38%, lead rose 0.16%, zinc gained 0.68%, tin ballooned 2.16%, and nickel climbed 1.27%.

Copper: SHFE 2307 copper finished 1,370 yuan/mt or 2.17% higher at 64,630 yuan/mt. The open interest lost 7,010 lots to 207,582 lots.

Spot premiums rose today on low market supply. The premiums will still be high next week. The traders keep a close eye on the inflow of imported spots. If the inflow of imported goods fails to make up for the demand gap, the spot premium will unlikely fall. Arbitrageurs will still manipulate the market trades.

Aluminium: SHFE 2307 aluminium added 595 yuan/mt or 3.38% to 18,185 yuan/mt. The open interest fell 11,785 lots to 256,640 lots.

On the macro level, the debt ceiling negotiations have failed to reach an agreement for now, adding to macro uncertainty. The US Fed swings on whether to raise interest rate or not. Consumption recovery is weaker than expected. Aluminium ingot inventories in some areas have begun to accumulate. Falling prebaked anode and coal prices weakened cost support to aluminium prices. It remains to be seen whether SHFE aluminium will fall below 18,000 yuan/mt in the short term.

Lead: SHFE 2307 lead rose 25 yuan/mt or 0.16% to 15,265 yuan/mt. The open interest gained 605 lots to 55,088 lots.

Spot supply was abundant today, hence some holders cut their quotes. The downstream companies, however, only restocked on rigid demand. The most-traded SHFE lead contract will hover around 15,250 yuan/mt in the short term on a stable macro front.

Zinc: SHFE 2307 zinc gained 130 yuan/mt or 0.68% to 19,285 yuan/mt. The open interest decreased 5,096 lots to 142,374 lots.

The overall spot trades were slack today since downstream companies were less willing to restock.

Tin: SHFE 2306 tin closed up 4,260 yuan/mt or 2.16% at 201,240 yuan/mt, with open interest falling 10,278 lots to 18,528 lots.

Nickel: SHFE 2306 nickel gained 2,110 yuan/mt or 1.27% to 168,110 yuan/mt. The open interest fell 4,087 lots to 34,364 lots.

On May 26, premiums of Jinchuan nickel were 9,800-10,300 yuan/mt. The average premium stood at 10,050 yuan/mt, down 600 yuan/mt from the previous trading day. NORNICKEL nickel was quoted at premiums of 6,800-7,000 yuan/mt, with an average of 6,900 yuan/mt, down 600 yuan/mt from a day ago. Spot pure nickel premiums fell at month-end. Nickel briquette prices were 168,600-169,100 yuan/mt, an increase of 200 yuan/mt from the previous trading day. The nickel briquette transactions 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.]

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