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SMM Morning Comment For SHFE Base Metals On June 14

iconJun 14, 2024 10:07
Source:SMM
Overnight, LME copper opened at $9,882/mt, fluctuated widely at the beginning, reaching a high of $9,908/mt, then kept falling, dropping to $9,740/mt near the end of the trading session, and finally closed at $9,787/mt, with a drop of 1.6%.

SHANGHAI, June 14 (SMM) –

Copper

Overnight, LME copper opened at $9,882/mt, fluctuated widely at the beginning, reaching a high of $9,908/mt, then kept falling, dropping to $9,740/mt near the end of the trading session, and finally closed at $9,787/mt, with a drop of 1.6%. Trading volume stood at 19,000 lots, and open interest stood at 305,000 lots. Overnight, the most-traded SHFE copper contract (2407) opened at RMB 80,070/mt, reached a high of RMB 80,200/mt at the beginning, then fluctuated downwards, dropping to RMB 79,060/mt near the end of the trading session, and finally closed at RMB 79,570/mt, with a drop of 0.57%. Trading volume stood at 40,000 lots, and open interest stood at 175,000 lots. On the macro front, the hawkish signals previously released by the US Fed strengthened the US dollar index, putting pressure on copper prices. In terms of fundamentals, after a certain decline in copper prices, some downstream sectors moderately replenished their inventories, but due to concerns about the continuous decline in future prices, current stockpiling is only based on immediate needs. Additionally, some smelters are still under maintenance, together with some domestic mainstream smelters arranging copper cathode exports, easing the pressure of abundant spot supply. According to the SMM survey, as of Thursday, June 13, SMM nationwide copper stocks in mainstream areas of China decreased by 12,800 mt to 429,300 mt compared to Tuesday, which is 336,700 mt higher YoY. The prices are expected to be under pressure due to the strong performance of the US dollar index.

Aluminum

The most-traded SHFE 2407 aluminum contract opened at 20,730 yuan/mt, with the highest point at 20,735 yuan/mt, the lowest point at 20,545 yuan/mt, and closed at 20,600 yuan/mt, a drop of 45 yuan/mt, or 0.22%. LME aluminum opened at $2,566/mt in the previous trading day, with the highest point at $2,591/mt, the lowest point at $2,528.5/mt, and closed at $2,544.5/mt, a drop of $24.5/mt, or 0.95%.

Summary: On the macro level, the US Fed's stance on cutting interest rates has been swinging, and regional conflicts have intensified, providing support for gold and commodity prices. On the fundamentals, the arrival of the consumption off-season together with increasing overseas market frictions has led to a decline in orders for aluminum processing enterprises, and the supply and demand relationship in the domestic aluminum market is gradually weakening. In the short term, aluminum prices are under pressure, and are expected to hover around the current level.

Lead

Overnight, LME lead opened at $2,174/mt. Since June, LME lead inventory stopped falling and started to rise, initiating a day-by-day accumulation mode. Under inventory pressure, LME lead fluctuated weakly throughout the day, finally closing at $2,162.5/mt, with a drop of 0.57%. Overnight, SHFE lead warrants increased again. The most-traded SHFE lead contract (2408) opened at RMB 18,645/mt, then gradually fluctuated downwards, reaching a low of RMB 18,495/mt, and finally closed at RMB 18,525/mt, with a drop of 0.48%. Open interest stood at 87,844 lots, an increase of 1,865 lots from the previous trading day.

Zinc

Overnight, LME zinc opened at $2,870/mt. At the beginning, positive and negative factors intertwined, and LME zinc briefly fell to $2,829.5/mt. Subsequently, investors reduced short positions, and LME zinc fluctuated upwards, reaching a high of $2,892.5/mt during the night session. Then, with the exit of bulls, LME zinc fell, finally closing at $2,870/mt, down $10/mt, with a drop of 0.35%. Trading volume reduced to 9,594 lots, and open interest decreased by 10,748 lots to 217,000 lots. Overnight, LME zinc recorded a long white candle, and LME zinc inventory fell by 2,000 mt to 255,900 mt, a decrease of 0.78%. Pressured by the prospect of a delayed US Fed rate cut, macro sentiment receded, leading to weak adjustments. LME zinc is expected to fluctuate.

Overnight, the most-traded SHFE zinc contract (2408) opened at RMB 23,820/mt. At the beginning, the entry of bulls led SHFE zinc to fluctuate upwards. Subsequently, the entry of shorts dragged SHFE zinc downwards, shifting lower to consolidate near RMB 23,650/mt, and finally closed at RMB 23,670/mt, down RMB 15/mt, with a drop of 0.06%. Trading volume reduced to 51,714 lots, and open interest increased by 1,363 lots to 77,320 lots. Overnight, SHFE zinc recorded a long black candle. With macro sentiment receding and zinc consumption entering the traditional off-season, SHFE zinc is expected to fluctuate.

Tin

Overnight, the most-traded SHFE tin contract closed at 270,510 yuan/mt, down 4,460 yuan/mt, with a decrease of 1.62%. The highest price was 274,700 yuan/mt, and the lowest was 268,900 yuan/mt.

Yesterday, spot premiums and discounts in domestic spot market for various tin ingot brands were as below. Small brand tin ingots were offered at discounts of 100 yuan/mt to premiums of 100 yuan/mt over SHFE 2407 tin contract, versus discounts of 200 yuan/mt to premiums of 400 yuan/mt for delivery brands and premiums of 400-800 yuan/mt for Yunxi brand. Tin prices fell slightly yesterday. Overall, the spot market was relatively quiet. SHFE tin warrant inventory increased by 92 mt to 15,554 mt, while LME tin inventory remained flat at 4,665 mt.

Nickel

On June 13, Jinchuan nickel was at a premium of 2,500-3,000 yuan/mt, with an average of 2,750 yuan/mt, flat compared to the previous trading day. Russian nickel was at a discount of 100-200 yuan/mt, with an average of 150 yuan/mt, flat compared to the previous trading day. In the morning, the market fluctuated at recent lows, leading to a slight recovery in spot market trades. The shortage of electro-deposited nickel continued, and spot premiums and discounts for various brands surged. Nickel briquette prices were 136,400-136,700 yuan/mt, down 450 yuan/mt from the previous trading day. The price spread between nickel briquette and nickel sulphate was about 8,905 yuan/mt (nickel sulphate prices were higher than nickel briquette prices by 8,905 yuan/mt).

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