SHANGHAI, Nov 3 (SMM) –Base metals generally closed with losses yesterday due to bearish sentiment triggered by iron ore and rebar prices hitting the daily limit down.
Copper: Three-month LME copper opened at $9503/mt last ngiht, hitting the highest and lowest points at $9,585/mt and 9,475/mt respectively, and closed at $9,514/mt, up 0.13%; and is expected to move between $9,470-9,550/mt today.
The SHFE 2112 copper contract opened at 70,200 yuan/mt in the overnight trading, hitting the lowest and highest prices at 69,750 yuan/mt and 70,510 yuan/mt respectively, before closing at 69,970 yuan/mt, down 0.01%; and is expected to move between 69,600-70,200 yuan/mt today.
On the macro front, the Fed is expected to announce the tapering of its monthly massive bond purchase program by Wednesday, and the market was looking for clue as of the timeline of tapering and the interest rate hike prospect. The overnight US dollar index rebounded and pressured copper prices. In the spot market, the downstream purchased on dips, and the market performance has been moderate.
Aluminium: Overnight, the most-traded SHFE 2112 aluminum contract opened at 20,045 yuan/mt, with the highest and lowest prices at 20,185 yuan/mt and 19,950 yuan/mt before closing at 19,995 yuan/mt, down 40 yuan/mt or 0.2%. LME aluminum opened at $2,722/mt on Tuesday morning and closed at $2,680/mt, down $39.5/mt or 1.45%. In terms of supply, there are no rumours of additional aluminum production restrictions, and the market still needs to pay attention to the impact of the concentrated arrivals of backlog aluminum ingots. Prices of ferrous metals and thermal coal continued to weaken, leaving aluminum prices vulnerable at 20,000 yuan/mt. Spot discounts in east China remained at around 90 yuan/mt amid downstream wait-and-see sentiment. Lower coal prices and concentrated arrivals will put downward pressure on aluminum prices.
Tin: Overnight, the SHFE 2112 tin contract declined. Market inventories are still at a low level and there is no obvious sign of inventory accumulation. The spot market is tight. Some smelters may reduce production slightly due to power rationing and tight raw material supply. Demand will gradually improve. The backwardation between SHFE 2111 and 2112 tin contracts is widening. Low inventory and high spot premiums will support SHFE 2112 tin contract.
Zinc: LME zinc saw increased volatility yesterday, which opened at $3,361.5/mt and hit a low of $3,307/mt. LME zinc closed at $3,341.5/mt, down $30/mt or 0.89%. Trading volume fell to 6,913 lots, and the open interest increased by 2,058 lots to 258,000 lots. LME zinc found support at the middle of the Bollinger Bands. LME zinc inventory decreased by 800 mt to 196,000 mt, a decrease of 0.41%. The market needs to pay attention to the production of smelters following the fall in energy prices. LME zinc is expected to move at $3,310-3,360/mt in the short term. Overnight, the most-traded SHFE 2112 zinc contract opened at 23,605 yuan/mt and moved between 23,500-23,800 yuan/mt before closing at 23,655 yuan/mt, down 140 yuan/mt or 0.59%. Trading volume fell to 86,000 lots, and open interest increased by 5 lots to 160,000 lots. SHFE zinc met resistance at the 5-day and 40-day moving averages, but found support at the 60-day moving average. On the supply side, the cost of electricity at overseas smelters has fallen, improving the profit margins of smelters, which may encourage overseas smelters to increase output. Galvanised pipe producers reduced production due to falling sales and increasing finished product inventories. In the spot market, volatility in zinc prices has intensified, and downstream buyers purchased as needed. Traders increased purchases for delivery of long-term orders. The energy crisis has been greatly eased, and the cost of overseas zinc smelters has fallen. However, the spot premiums in Europe and the United States are still at a high level. The most-traded zinc contract is expected to move within a range of 23,400-23,900 yuan/mt today. 0# domestic Shuangyan brand zinc is expected to trade on par with the SHFE 2112 contract.
Lead: Three-month LME lead opened at $2377.5/mt yesterday and lost 0.42% to close at $2361/mt. The market was generally cautious ahead of the Fed’s interstate meeting, and the LME non-ferrous metals all corrected down amid pressures.
The most-active SHFE 2111 lead contract opened at 15,765 yuan/mt and hit a modest high of 15,770 yuan/mt before closing at 15705 yuan/mt, a decrease of 0.38%.
The SHFE Lead pulled back slightly amid a quiet broad market and falling LME lead. However, the declined of SHFE lead will be limited on the back of slightly falling zinc ingot social inventory and potentially disrupted production due to returned power rationing in Anhui.
Nickel: SHFE nickel contract closed at 144,470 yuan/mt. The market supply of pure nickel was comparatively sufficient at the moment, and nickel briquette quotations were offered with discounts. The supply of nickel sulphate has been on the rise, while NPI was still in short supply. On the demand side, the downstream mostly purchased EMM on demand. While for NPI, the steel mills have not kicked off their centralised purchase period; therefore, the market has been quiet up to now. The current nickel market volatility was mainly the result of market sentiment, and is likely to stay congested.
