Metals Generally Decline, Lithium Carbonate, SHFE Silver, SHFE Lead, and Coking Coal and Coke See Largest Drops, Oil Prices May Continue to Rise on Weekly Basis [SMM Midday Review]

SMM Mar 21 News:

In the metal market:

As of midday close, domestic base metals generally fell. SHFE lead dropped 1.33%, SHFE copper fell 0.3%. SHFE nickel fell 0.72%. SHFE aluminum fell 0.29%, while SHFE zinc slightly rose. SHFE tin increased 0.62%.

Additionally, alumina rose 0.77%. Lithium carbonate fell 1.33%, silicon metal fell 1.18%. The most-traded polysilicon futures contract fell 0.44%.

Ferrous metals mostly fell, with iron ore down 0.13%, rebar up 0.13%, HRC up 0.15%, and stainless steel down 0.15%. In the coking coal and coke sector, coking coal fell 1.56%, and coke fell 1.66%.

In the overseas market, as of 11:33, all foreign base metals declined. LME copper fell 0.27%, LME zinc fell 0.26%, LME aluminum fell 0.39%, and LME tin fell 0.71%. LME nickel fell 0.61%. LME lead fell 0.71%.

In precious metals, as of 11:33, COMEX gold fell 0.14%, and COMEX silver fell 0.52%. Domestically, SHFE gold fell 0.14%, and SHFE silver fell 1.43%.

As of midday close, the main European shipping futures contract rose 1.12%, reaching 2051.7 points.

As of 11:33 on March 21, some futures midday performance:

》Mar 21 SMM Metal Spot Prices

Spot and Fundamentals

Copper: The operating rate of major domestic refined copper rod enterprises for the week (3.14-3.2) unexpectedly dropped to 69.93%, down 5.21 percentage points MoM, 2.31 percentage points lower than expected. During the week, under the combined influence of macro and fundamental factors, copper prices continued to rise, with only a few downstream enterprises gradually accepting or expecting future orders, while most reduced orders and cargo pick-up due to high prices... 》Click for more details

Macro front

Domestic:

[First batch of pilot projects for long-term insurance fund reform has invested 50 billion yuan] Pilot projects for long-term insurance fund reform are advancing, with the first batch of projects successfully investing 50 billion yuan by early March. Since the beginning of the year, the second batch of projects has approved 162 billion yuan in pilot funds, and the number of participating institutions has expanded to eight insurance companies. Liu Fan, vice president of China Life Asset Management Co., Ltd., stated that the investment direction mainly includes large blue-chip stocks with good corporate governance and excellent operating performance, which also focus on shareholder returns. Specific industries include finance, energy and chemicals, industrial infrastructure, consumer goods, including new energy transition fields and new quality productive forces development fields, which can support national industry development and economic transformation. Additionally, insurance funds frequently appear in the list of publicly listed firms' surveys. Data shows that since the beginning of the year, insurance funds have conducted over 2,800 surveys of A-share listed companies, covering about 600 companies. Among them, companies in the electronics, machinery equipment, computer, biomedicine, power equipment, and automotive industries have received the most attention. (CCTV News)

[Central bank conducts net withdrawal of 87.7 billion yuan in open market operations] The central bank conducted 93 billion yuan in 7-day reverse repo operations today, with a winning bid rate of 1.50%, unchanged from before. As 180.7 billion yuan in 7-day reverse repos matured today, it achieved a net withdrawal of 87.7 billion yuan.

[Hainan plans to launch NEV promotion activities in 2025] To implement the requirements of the "Hainan Clean Energy Vehicle Development Plan" and the "Several Measures to Encourage NEV Promotion and Application in Hainan from 2023-2025," further expand the auto consumption market, tap into auto consumption potential, address the shortcomings of NEV consumption and use in rural areas, and improve residents' green and safe travel levels, providing strong support for beautiful countryside construction and rural revitalization, the Hainan Provincial Department of Industry and Information Technology plans to select a third-party agency to conduct NEV promotion activities in 2025.

► On March 21, the central parity rate of the RMB exchange rate in the interbank foreign exchange market was 7.176 per US dollar.

US dollar:

As of 11:33, the US dollar index rose 0.14% to 103.96. The US Fed, as expected, maintained interest rates and indicated that it may cut interest rates twice later this year, each by 25 basis points. Data released on Thursday showed a slight increase in initial jobless claims last week, but government spending cuts, interest rate levels, and policy uncertainties may dim the outlook. The Conference Board reported that the measure of future economic activity, after falling 0.2% in January, decreased another 0.3% in February. According to LSEG, market participants expect the US Fed to cut interest rates by 63 basis points this year, with a 71% probability of at least a 25-basis-point cut at the June meeting.

Other currencies:

ECB President Christine Lagarde and central banks warned of uncertainties, raising risk aversion, and the excitement over the German parliament's approval of the spending plan continued to fade; the eurozone consumer confidence index will be released on Friday (Reuters survey forecast -13.0, previous value -13.6). (Forex.com)

Japan's consumer inflation slowed slightly in February but remained on an upward trend, providing further justification for the Bank of Japan to raise interest rates. Despite temporary relief from overall inflation pressure due to energy subsidies, factors such as record-high rice prices and strong wage growth continue to push up price levels, maintaining strong expectations for a Bank of Japan rate hike. (Forex.com)

Data:

Today, data to be released include the total amount and high yield of the 10-year TIPS auction on March 20 in the US, New Zealand's trade balance for February, Japan's national core CPI for February, the UK's Gfk consumer confidence index for March, Canada's core retail sales for January, and the preliminary eurozone consumer confidence index for March.

Additionally, Bank of Canada Governor Tiff Macklem will deliver a speech, and FOMC permanent voter and New York Fed President John Williams will speak.

Crude oil:

As of 11:33, crude oil futures were up, with WTI rising 0.46% and Brent up 0.35%. OPEC and seven member countries reached a new production cut plan, increasing market expectations of supply tightening and supporting oil prices. Oil prices are expected to record a second consecutive weekly gain.

OPEC announced a new arrangement on Thursday, requiring seven member countries to further reduce oil production to offset excess output, providing support for oil prices. According to the table on the OPEC website, the monthly production cuts range from 189,000 barrels/day to 435,000 barrels/day. This arrangement will last until June 2026. Analysts said this plan would cushion the impact of all the supply increases announced by OPEC earlier, which will take effect next month. OPEC confirmed earlier this month that eight member countries will increase production by 138,000 barrels/day from April, partially reversing the 5.85 million barrels/day production cuts agreed upon since 2022 to support the market. (Webstock Inc.)

Spot market overview:

► Macro Boost vs. Terminal Rejection: High Copper Prices May Lead to Three Consecutive Declines in Operating Rates [SMM Refined Copper Rod Weekly Review]

► Shanghai Zinc: Premiums Stable, Poor Trading Performance [SMM Midday Review]

► Tianjin Zinc: Zinc Prices Maintain Fluctuating Trend, Downstream Restocking Mainly [SMM Midday Review]

► DRC Geopolitical Risks Escalate, Tin Ore Supply Disruptions Intensify [SMM Tin Midday Review]

► [SMM Analysis] Conservative Future Expectations, Non-Oriented Silicon Steel Prices to Show Stable but Weak Trend Next Week

Other metal spot midday reviews will be updated shortly, please refresh to check~