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SMM Morning Comment For SHFE Base Metals September 26

iconSep 26, 2023 09:55
Copper prices went down overnight on rebounding US dollar index
SHANGHAI, Sep 26 (SMM) –
Copper prices went down overnight on rebounding US dollar index
LME copper prices opened at $8163/mt and closed at $8149/mt last evening, down 0.6%. Trading volume was 17,000 lots and open interest stood at 266,000 lots. The most active SHFE 2311 copper contract prices opened at 67800 yuan/mt and finished at 67480 yuan/mt last evening, down 0.57%, with the low-end of 67410 yuan/mt and the high-end of 67880 yuan/mt. Trading volume was 28,000 lots, and open interest stood at 146,000 lots. On the macro front, Chicago Fed President Goolsby, who is regarded as a dovish representative, said that continued high inflation risk is a greater risk, a soft landing is possible, and it "feels" that interest rates will be maintained at high levels for longer than the market expects. The Fed's hawkish comments sent the dollar higher and copper prices were under pressure. In terms of fundamentals, market activity was relatively brisk ahead of holidays. Transactions in East China were acceptable, but the price difference between the cargoes with front-month invoice and with next-month invoice widened. Inventories in South China have declined for four consecutive days, mainly due to the increase in demand before the holiday. Available spot resources were not abundant, and the spot premiums in South China rose In terms of consumption, there is more demand for downstream replenishment near the holidays, and it is expected that consumer demand will increase significantly this week. Copper prices will weaken due to higher US dollar.
Overnight, the most-traded SHFE 2311 aluminum contract opened at 19,325 yuan/mt, with its lowest and highest at 19,295 yuan/mt and 19,295 yuan/mt before closing at 19,350 yuan/mt, down 45 yuan/mt or 0.23% compared with the previous trading day. LME aluminum opened at $2,241.5/mt on Monday, with its high and low at $2,241.5/mt and $2,121.2/mt respectively before closing at $2,234/mt, a decrease of $17/mt or 0.76%.
On the macro front, the Federal Reserve announced the suspension of interest rate increases in September. However, considering the poor economic situation in Europe and the United States, the Fed's members may still push interest rate hikes. Domestic macroeconomic sentiment remained stable. On a fundamental level, the growth rate of domestic aluminum supply is decelerating, the import window is open, and the market's overseas aluminum ingot supply is on the rise. But domestic downstream maintained high consumption, so low inventory continued. Short-term low inventory and low warehouse receipts will support aluminum prices, though. SHFE aluminum contract is anticipated to oscillate at a high level. Follow-up attention should be paid to domestic aluminum inventory and downstream consumption.
SMM lead morning comments
SHANGHAI, Sep 26 (SMM) -
Overnight, LME lead prices opened at US$2,208/mt and finally closed at US$2,182/mt, down US$22/mt, or 1.0%. The most active SHFE lead contract prices overnight opened at 16,880 yuan/mt, touched a high of 16,900 yuan/mt at the beginning of the trading session, and then fell all the way to as low as 16,705 yuan/mt. The contract finally closed at 16,780 yuan/mt.
SMM Zinc Morning Comments
Overnight, LME zinc prices opened at US$2,556.5/mt and dropped to a low of US$2516.5/mt, and finally closed down at US$2532/mt, down US$24/mt, a decrease of 0.94%. The trading volume reached 5907 lots, and the open interest reached 226,000 lots. LME zinc inventories decreased 3850 mt to 101550 mt.
Overnight, the most active SHFE 2311 zinc contract prices opened at 21765 yuan/mt, and touched a high of 21785 yuan/mt. The contract finally closed up at 21,745 yuan/mt, an increase of 20 yuan/mt, or 0.09%. The trading volume was 59,200 lots, and the open interest reached 128,000 lots.
SHFE 2310 tin contract fell sharply after opening on the Monday night session to a relatively low of 219,040 yuan/mt and rebounded slightly, then finally closed at 220,360 yuan/mt, down 1.39%.
Spot premiums and discounts barely changed yesterday. Small brand tin ingots were offered at premiums of 0-100 yuan/mt, premiums of 300-600 yuan/mt for delivery brands, premiums of 800-1,100 yuan/mt for Yunxi brands, and discounts of 300-600 yuan/mt for imported tin brands. Downstream enterprises stocked up for upcoming holiday, even as tin prices rose again yesterday. Traders reported that the shipment yesterday morning was average.
Overnight, the most-traded SHFE nickel contract opened at 157,210 yuan/mt, and closed at 158,160 yuan/mt, up 950 yuan/mt. Trading volume dropped by 14,705 lots, and open interest decreased by 7,954 lots. On the macro front, market attention should be paid to the data of the US unemployment benefits application number, which reflects the current activity of the US job market and thereby affects market expectations for subsequent interest rate hikes by the Fed. In the fundamentals, yesterday’s spot market was affected by the pre-holiday replenishment and the transaction atmosphere was acceptable. In summary, it is expected that nickel prices may rebound slightly in the future.
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