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SMM Morning Comment For SHFE Base Metals On June 20

iconJun 21, 2024 09:59
Source:SMM
Overnight, LME copper opened at $9,801/mt, hit a session low of $9,777/mt at the beginning, then fluctuated upwards to a session high of $9,889/mt at the end of the trading session, and finally closed at $9,883.5/mt, with open interest at 320,000 lots.

SHANGHAI, June 20 (SMM) –

Copper

Overnight, LME copper opened at $9,801/mt, hit a session low of $9,777/mt at the beginning, then fluctuated upwards to a session high of $9,889/mt at the end of the trading session, and finally closed at $9,883.5/mt, with open interest at 320,000 lots. Overnight, the most-traded SHFE copper contract (2408) opened at RMB 79,670/mt, rose to a session high of RMB 80,530/mt at the beginning, then consolidated, and finally closed at RMB 80,390/mt, up 0.92%, with trading volume at 53,000 lots and open interest at 165,000 lots. On the macro front, US Fed officials reiterated that a clear inflation path is needed before cutting rates. The number of initial jobless claims in the US last week exceeded expectations, and US new home starts in May fell by 5.5%, the lowest level in four years, leading to a rise in copper prices. On the fundamentals side, on the supply side, after delivery, smelters' willingness to ship to warehouses decreased, while there were warrants being offered for sale, increasing supply. On the consumption side, as copper prices rose again, downstream consumption was suppressed, making it easier for premiums to fall than rise. As of Thursday, June 20, SMM national mainstream copper stocks decreased by 3,200 mt from Monday to 398,400 mt, and by 30,900 mt from a week ago, with the destocking speed slowing down. Overall, copper prices continued to rebound, but with a strong US dollar and high stocks, the upside potential is limited.

Aluminum

Overnight, the most-traded SHFE 2408 aluminum contract opened at 20,595 yuan/mt, reaching a high of 20,630 yuan/mt and a low of 20,550 yuan/mt, and closed at 20,630 yuan/mt, up 35 yuan/mt, an increase of 0.17%. The previous trading day, LME aluminum opened at $2,493 /mt, reached a high of $2,525.5/mt and a low of $2,491/mt, and closed at $2,521/mt, up $31.5/mt, an increase of 1.27%.

Summary: On the macro level, the US Fed's stance on rate cuts has been wavering, but global liquidity is gradually becoming abundant. Escalating regional conflicts provided support for the prices of commodities, primarily gold as a safe haven and crude oil. On the fundamentals, the market has gradually digested the impact of weakening consumption, and the relatively low aluminum prices prompted some downstream restocking at lower levels. Social inventory showed destocking yesterday. In the short term, aluminum prices are expected to see a slight rebound.

Lead

Overnight, LME lead opened at $2,200.5/mt, fluctuated downwards during the Asian session, rebounded after hitting a low of $2,162/mt during the European session, reached a session high of $2,224/mt, and finally closed at $2,215.5/mt, up $22.5/mt, or 1.03%. Overnight, the most-traded SHFE lead contract (2408) opened at RMB 18,805/mt, rose slightly to a session high of RMB 18,905/mt at the beginning, then fell back to consolidate near the daily moving average, touched a low of RMB 18,680/mt, and finally closed at RMB 18,840/mt, down RMB 200/mt, or 1.05%.

Zinc

Overnight, LME zinc opened at $2,860/mt, fluctuated around the daily moving average at the beginning, then quickly fell to a low of $2,831/mt, rebounded and rose to a session high of $2,888.5/mt, and finally closed up at $2,868.5/mt, up $3/mt, or 0.1%, with trading volume reduced to 5,232 lots and open interest reduced by 1,078 lots to 231,000 lots. Overnight, LME zinc recorded a bullish candlestick, with the 10-day moving average providing support. LME zinc stocks decreased by 2,725 mt to 244,375 mt, down 1.1%. Signs of cooling in the US job market and poor housing market data indicated a slowdown in the US economy, boosting market confidence in a US Fed rate cut this year. LME zinc first fell and then rose, with its center of gravity slightly moving upwards.

Overnight, the most-traded SHFE zinc contract (2408) opened at RMB 23,840/mt, fell to a low of RMB 23,790/mt at the beginning, then fluctuated upwards to a session high of RMB 24,000/mt, and finally closed up at RMB 23,980/mt, up RMB 140/mt, or 0.59%, with trading volume reduced to 73,571 lots and open interest increased by 1,712 lots to 94,522 lots. Overnight, SHFE zinc recorded a bullish candlestick, with the 5-day moving average providing support. Boosted by overseas sentiment and the continued tight raw material logic, SHFE zinc fluctuated strongly.

Tin

The closing price of the most-traded SHFE tin contract in the night session yesterday was 275,580 yuan/mt, up 4,390 yuan/mt, an increase of 1.62%. The highest price was 275,600 yuan/mt, and the lowest was 272,760 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 0-100 yuan/mt over SHFE 2407 tin contract, versus premiums of 0-500 yuan/mt for delivery brands and premiums of 600-800 yuan/mt for Yunxi brand. After a slight increase in SHFE tin prices during yesterday's morning session, they pulled back, and downstream producers remained cautious. Overall, the spot market was relatively quiet. Yesterday, SHFE tin warrants decreased by 113 mt to 15,138 mt, while LME tin inventory decreased by 20 mt to 4,745 mt.

Nickel

On June 20, Jinchuan nickel was at a premium of 2,700-3,000 yuan/mt, with an average of 2,850 yuan/mt, down 50 yuan/mt compared to the previous trading day. Russian nickel was at a discount of 300 yuan/mt to a premium of 100 yuan/mt, with an average discount up 50 yuan/mt to 100 yuan/mt. In the morning, the market saw a slight upward movement due to macro fluctuations but remained at a recent low. On the other hand, the shortage of electro-deposited nickel in the spot market continued, and the premiums and discounts for various brands remained firm. The price of nickel briquette was 133,450-133,700 yuan/mt, up 1,225 yuan/mt compared to the previous trading day. The price spread between nickel briquette and nickel sulphate was about 3,925 yuan/mt (nickel sulphate prices were 3,925 yuan/mt higher than nickel briquette prices).

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