SMM2, March 9: metals on the outer disk were mixed yesterday, and the price of (LME) copper on the London Metal Exchange rose on Monday as reduced inventories indicated rising demand and optimism related to the outlook for the massive novel coronavirus rescue plan in the United States also supported copper prices. Analysts point out that stocks on the exchange are still quite low. This is a good indication that there is a demand for copper in the manufacturing industry, not just a speculative theme. Spot copper rose from three-month copper to its highest level since September 2020, indicating concerns about spot supply. There were ups and downs in the LME metal market this morning. By around 09:30, Lun Copper rose nearly 0.4%, Lun Zinc rose nearly 0.2%, Lun Aluminum rose nearly 0.5%, Lun Nickel fell nearly 0.2%, Lunxi fell nearly 0.4%, Lun lead fell nearly 0.3%. On the domestic side, international copper rose nearly 1.4%, Shanghai Copper and Shanghai Aluminum rose nearly 1.2%, Shanghai lead rose nearly 0.6%, Shanghai Nickel rose nearly 0.4%, and Shanghai Zinc fell nearly 0.3%.
Copper, on the macro side, was boosted by production cuts in OPEC+ member countries and optimism about novel coronavirus vaccination, Meibu oil continued to rise, hitting a new high in more than a year. On the other hand, optimistic expectations of the Biden administration's 1.9 trillion stimulus package boosted U. S. stocks for a sixth day in a row, hitting an all-time closing high on Monday. Driven by the prospect of economic stimulus measures, the macro mood continues to warm up. The weakness of the US dollar, higher US stocks and a big rise in crude oil contributed to the continued rally in copper.
[minutes of SMM Morning meeting] the dollar fell and crude oil rose. Copper rose overnight.
In terms of aluminum, there are only two working days left before the Spring Festival, and the impact of production suspension and reduction of aluminum downstream enterprises during the Spring Festival holiday continues to increase. Under the decrease in orders and shipments, it is still in the accumulation cycle, but the extent of accumulation in the current market is significantly lower than previously expected by the market. The holder expects that the spot circulation will tighten after the holiday, and the willingness to raise the price is strong. Shanghai Aluminum is expected to remain relatively strong during the week, and it is possible to continue to move higher slightly. We need to continue to pay attention to the impact of inventory changes on market sentiment and contract structure.
[minutes of SMM Morning meeting] the range of Leiku is lower than the market expected. Shanghai Aluminum remains strong before the festival.
In terms of lead, overnight LME lead inventory continued the trend of destocking, reducing 400 tons to 93250 tons, mainly going to warehouses in Asia. Boosted by the optimistic expectations of the US stimulus package and the implied demand improvement in Asian markets, overnight lead shifted its focus upward and lengthened the lower shadow line positive pillar, which was boosted by the optimistic expectations of the US stimulus package and the implicit demand improvement in Asian markets. As of today, there are only the last two trading days before the festival, the festive market makes long-short trading cautious, Shanghai lead continues to rise slightly higher pressure, overnight under 15200 yuan / ton effective support.
[minutes of SMM Morning meeting] the macro mood of strong lead strength in the overnight trading period continues to be optimistic.
Zinc, overnight Lun zinc recorded a long shadow column, the upper Brin Road middle rail to form a compression, the lower 5 / 10 moving average to provide support. Overnight LME inventory decreased by 625 tons to 289725 tons, a decline of 0.22%. The decline in investor confidence in the euro zone and the mutation of novel coronavirus in the United States in February could lead to a new peak of the epidemic in the United States, dampening long sentiment, but Biden's $1.9 trillion bailout plan limited its decline. Overnight Shanghai zinc recorded a cross line, the lower 5-day moving average supported the bottom, and the upper 20-day moving average formed compression. Under the background of tight supply, enterprises in the lower reaches of the festival are basically on holiday, and transactions in the spot market are light, but consumption expectations after the festival still support zinc prices and are expected to remain strong and volatile.
[minutes of SMM Morning meeting] trading in the zinc spot market is light near the Spring Festival holiday.
In terms of nickel, the news that ignited the market most last week was the increase in the power restriction policy in Inner Mongolia, the rising trend of high-carbon ferrochromium, forming cost support for stainless steel; from the perspective of nickel itself, it still maintained a good judgment in the early stage. With the Spring Festival approaching the mentality of traders is more cautious, the price itself is difficult to have more fluctuations, but the fundamentals look at nickel is relatively ideal, stainless steel factory output is higher than the same period in previous years and the hot market of new energy still exists, market participants are more optimistic about the post-holiday market and the long-term trend of nickel, bulls release bargain-seeking intention to increase positions. It is estimated that this week, Shanghai nickel is 130000-135000 yuan / ton, Lunni is 17700-18400 US dollars / ton.
[minutes of SMM Morning meeting] Nickel market is gradually entering holiday mode. Trading in plain high nickel pig iron and stainless steel has stagnated.
In terms of black series, thread rose by nearly 0.9%, hot coil by nearly 1.4%, coking coal and coke by nearly 1%, iron ore by nearly 1.3%, and stainless steel by nearly 0.9%. According to SMM research, the thread output of blast furnace steel mills mainly producing building materials was 8.049 million tons in February, which was 0.24% higher than that in January, and the reel production was 2.893 million tons, an increase of 1.56% compared with the previous month. The increment mainly comes from the overhaul and resumption of production of some steel mills. In the third and fourth quarters of 2020, the strong performance with the raw material side was followed by an accelerated decline in steel mill profits, which led to a continuous decline in the production schedule of rebar mills for seven months in a row. Although the production schedule of steel mills has rebounded slightly this month, it does not mean that the pressure on thread supply has increased.
[SMM Thread February production scheduling report] Foreign Trade profit is better. Domestic thread supply shrank by 2.32% in February.
The last period of crude oil rose nearly 1.9%, US crude oil futures rose 2% on Monday, and Brent crude oil futures closed above $60 a barrel for the first time in more than a year, as the market was optimistic about the economic recovery and hoped that novel coronavirus's plan to relieve difficulties in the United States would be passed. Oil prices also gained support after US President Joe Biden (Joe Biden) said he would not immediately lift sanctions against Iran. Analysts pointed out that several factors work together to support oil prices, the most important of which is the current enthusiastic expectation of novel coronavirus vaccination in the financial market. In addition, the possibility of the Biden administration passing a second economic aid bill and the recent positive performance of the Chinese economy have boosted investor confidence in the pace of economic recovery in 2021.
In terms of precious metals, Shanghai gold rose nearly 1.3 per cent, while Shanghai silver rose nearly 1.8 per cent. Comex gold futures rose more than 1 per cent on Monday as the market expected a large-scale economic stimulus package in the US, which enhanced the attractiveness of gold as a hedge against inflation. U.S. president Joe Biden and congressional Democrats cleared the way for the $1.9 trillion novel coronavirus rescue plan. Lawmakers approved a budget resolution that allowed them to pass the bailout plan without Republican support. U.S. Treasury Secretary Yellen said Sunday that if Congress approves the stimulus package, the United States will return to full employment next year.
As of 09:30, the status of contracts in the metals and crude oil markets:
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