SMM Morning Comment For SHFE Base Metals November 3

SHANGHAI, November 3(SMM) –
Copper
Copper prices rose as US job market cools
LME copper prices opened at $8138.5/mt and closed at $8176.5/mt in overnight trading, a gain of 0.88%, with the low-end of $8123.5/mt and the high-end of $8180/mt. Trading volume was 17,000 lots, and open interest stood at 262,000 lots. The most active SHFE 2312 copper contract prices opened at 67530 yuan/mt and closed at 67480 yuan/mt last evening, down 0.01%, with the high-end of 67660 yuan/mt and the low-end of 67440 yuan/mt. Trading volumes stood at 21,000 lots and open interest stood at 153,000 lots. On the macro front, initial jobless claims in the United States recorded 217,000 in the week to October 28, a new high since the week of September 9; continued jobless claims last week increased for the sixth consecutive week, indicating that it started to be harder for the unemployed people to find a new job. In terms of fundamentals, the supply of goods in East China has been replenished, and the premiums and discounts shifted downwards, but the enthusiasm of some downstream companies to buy goods was still limited. In terms of consumption, copper prices has shifted downwards, with more downstream buyers stood on the sidelines, with demand expected to shrink compared with before. In terms of price, European and US central banks have recently suspended interest rate hikes, and copper prices are expected to remain within the current range.
Aluminum
Overnight, the most-traded SHFE 2312 aluminum contract opened at 19190 yuan/mt, with its low and high at 19115 yuan/mt and 19205 yuan/mt before closing at 19115 yuan/mt, down 90 yuan/mt or 0.47%. LME aluminum opened at $2244.5/mt on Thursday, with its low and high at $2224.5/mt and $2251.5/mt respectively before closing at $2232/mt, down 0.47%.
There is still great uncertainty in overseas macro front. U.S. economic data shows that the U.S. economy is resilient. The U.S. dollar index fluctuates at a high level, suppressing commodities. China has announced to issue an additional one trillion yuan of local government bonds, which could boost the economy and market. In terms of fundamentals, some aluminum billet factories have recently reduced production, the industry's ingot casting volume has increased month-on-month. The domestic aluminum supply will remain high in short-term. And imported ingots continue to enter China. Downstream consumption is switching from peak season to off-season. Destocking of aluminum ingot social inventory is not smooth. In the short term, aluminum prices may remain rangebound. We need to pay attention to domestic aluminum inventories and downstream consumption in the future.
Lead
SMM Lead Morning Comment
SHANGHAI, Nov 3 (SMM) -
LME lead opened at $2110.5/mt overnight and rose by 0.88% to close at $2128/mt, after hitting the lowest point at $2108/mt and the highest point at $2129/mt.
The most traded SHFE 2312 lead contract opened at 16490 yuan/mt and rose by 0.1% to end at 16535 yuan/mt, after hitting the lowest point at 16475 yuan/mt and rising to the highest level at 16560 yuan/mt.
Zinc
SMM Zinc Morning Comment
Overnight, LME zinc opened at US$2,504.5/mt, then fluctuated around the daily moving average. During the European trading session, LME zinc moved up and hit a high of $2,538/mt. During the trading session, LME zinc quickly moved down to $2,480/mt, and reached a low of $2,473/mt, and finally closed down at $2,480/mt, down $17/mt, or 0.68%. The trading volume decreased by 6,109 lots to 10,092 lots, and open interest increased by 1541 lots to 200,000 lots. LME stocks fell by 500 mt to 82,200 mt, a decrease of 0.60%.
The most active SHFE 2312 zinc contract prices opened at 21555 yuan/mt and lost 130 yuan/mt or 0.61% to settle at 21335 yuan/mt in overnight trading, with the high-end of 21615 yuan/mt and the low-end of 21295 yuan/mt. Trading volumes were 87,400 lots and open interest fell 6551 lots to 86,800 lots.
Tin
SHFE 2312 tin contract fell to 204560 yuan/mt overnight and then bounced back a little, closing at 204800 yuan/mt, down 0.37%.
Yesterday, spot premiums and discounts in domestic spot market for various tin ingot brands did not change much. Small brand tin ingots were offered at premiums of 300-500 yuan/mt, versus premiums of 500-800 yuan/mt for delivery brands, premiums of 1000-1200 yuan/mt for Yunxi brand, and discounts of 400 yuan/mt for imported brand tin ingots. Tin prices fell slightly yesterday, and the purchasing enthusiasm of downstream companies dropped slightly compared with the previous day. Generally speaking, the spot market transactions were cooled down slightly.
Nickel
Overnight, the most-traded SHFE nickel contract opened at 141370 yuan/mt, and closed at 140830 yuan/mt, up 190 yuan/mt. Trading volume fell by 30225 lots, and open interest decreased by 2708 lots. On the macro front, on November 1, local time, the minutes of the Federal Reserve’s latest Federal Open Market Committee (FOMC) monetary policy meeting showed that the Federal Reserve decided to maintain the target range of the federal funds rate at 5.25% to 5.50%, in line with market expectations. From a fundamentals perspective, the trend of pure nickel inventory accumulation remains unchanged, and downstream demand has not yet improved. Yesterday’s spot market transactions were still weak. Nickel price is expected to be move rangebound.