SMM Evening Comments (Mar 10): Shanghai Nonferrous Metals Closed with Losses on Upcoming US Non-farm Payrolls

SHANGHAI, Mar 10 (SMM) - Shanghai nonferrous metals closed with losses in day trading. On the macro front, the US initial jobless claims in the week ended March 4 recorded 211,000, higher than the expected 195,000, which weighed on US dollar index. The US February non-farm payrolls after seasonal adjustment is to be released tonight, and the market expects further rate hikes if the readings remain strong.

SHFE copper added 0.71 %, aluminium slid 1.35%, lead edged down 0.16%, zinc declined 1.63%, tin tumbled 3.83%, and nickel shed 3.96%.

Copper: The most-traded SHFE 2304 copper closed down 0.71% or 490 yuan/mt at 68,810 yuan/mt, with open interest down 320 lots to 143,690 lots.

In the spot market, falling copper prices stimulated downstream enterprises to purchase, and the active transactions further lifted the spot premiums. The downstream buyers were keen on restocking over the week, which was reflected in the decline of 14,000 mt in the copper inventory in Shanghai.

Aluminium: The most-traded SHFE 2304 aluminium closed down 1.35% or 250 yuan/mt at 18,265 yuan/mt, with open interest up 10,043 lots to 196,068 lots.

Recently, the Federal Reserve has frequently made hawkish statements, putting the prices of non-ferrous metals under pressure. It is necessary to continue to pay attention to the US inflation data. Downstream operating rates and orders improved month-on-month, and the market is gradually entering peak season. However, persistently high inventory of aluminium ingots will prevent aluminium prices from going up, which may trade rangebound.   

Lead: The most-traded SHFE 2304 lead closed down 0.16% or 25 yuan/mt at 15,155 yuan/mt, with open interest up 1,084 lots to 68,263 lots.

In the spot market of secondary lead, most enterprises were still reluctant to quote when SHFE lead 2304 contract hovered at low levels. They only made shipment under long-term orders. The price gap between secondary refined lead and lead scrap narrowed to 25 yuan/mt. Therefore, secondary refined lead smelters were tough on their offers.

Zinc: The most-traded SHFE 2304 zinc closed down 1.63% or 380 yuan/mt at 22,870 yuan/mt, with open interest up 2,596 lots to 84,762 lots.

Zinc prices crashed today. Traders were cautious in quoting, but downstream enterprises were motivated to purchase on dips, allowing brisk trading in the spot market.

Tin: The most-traded SHFE 2304 tin closed down 3.83% or 7,440 yuan/mt at 186,950 yuan/mt, with open interest up 3,672 lots to 75,728 lots.

In the spot market, the most smelters quoted low amid plummeting SHFE tin prices and held prices firm. The transactions improved slightly with growing inquiries.

Nickel: The most-traded SHFE 2304 nickel closed down 3.96% or 7,400 yuan/mt at 179,670 yuan/mt, with open interest up 11,466 lots to 81,812 lots.

In the spot market, Jinchuan nickel was quoted in premiums of 6,300-7,500 yuan/mt, with an average of 6,900 yuan/mt, down 200 yuan/mt on a daily basis. NORNICKEL nickel was in premiums of 2,400-2,600 yuan/mt, with an average of 2,500 yuan/mt, down 400 yuan/mt. Nickel futures and spot prices both declined further during the week, but the spot transactions dropped due to lower-than-expected downstream deman. For nickel briquette, the prices stood between 182,300-182,800 yuan/mt, down 7,500 yuan/mt from the previous trading day. 

[Disclaimer: The above representation and data is based on market information SMM believes to be reliable at the time of acquiring as well as the comprehensive assessment by SMM research team, and any and all information provided in this article is for reference only. This article does not constitute a direct recommendation for investment or any decisions in any form and clients shall act on their own discreet and any decisions made by clients are not within the responsibility of SMM.]