SMM Evening Comments (Nov 22): Shanghai Nonferrous Metals Closed Mostly with Losses amid Bearish Sentiment

SHANGHAI, Nov 22 (SMM) – Shanghai nonferrous metals closed mostly with losses led by SHFE zinc as the hawkish rhetoric of US Fed officials weighed on the base metals prices.

Shanghai copper fell 1.08%, aluminium slid 0.66%, lead lost 0.03%, zinc shed 2.63%, tin dropped 1.25%, and nickel gained 0.15%.

Copper: The most-traded SHFE 2212 copper closed down 1.08% or 700 yuan/mt at 64,410 yuan/mt, with open interest down 11,150 lots to 121,664 lots.

The spot market extended animation yesterday. The premiums of mainstream standard-quality in Shanghai stood at 450-470 yuan/mt in early trade. In the mainstream trading hours, some buyers with cargoes on hand forced down the premiums to 420-430 yuan/mt, but some sellers with long-term orders on hand kept the premiums at 440-460 yuan/mt. The premiums in Guangdong remained at 700-750 yuan/mt amid short supply, increasing market inquiries for cross-regional transactions.

Aluminium: The most-traded SHFE 2212 aluminium closed down 0.66% or 125 yuan/mt at 18,875 yuan/mt, with open interest down 10,829 lots to 152,960 lots.

In the spot market, the traders were active in making shipment today amid relatively high premiums and sufficient spot sources, but the demand side was muted, and downstream players mostly purchased on rigid demand. The expected arrivals in east China have not yet realised, and the social inventory will remain, supporting the premiums to some extent.

Lead: The most-traded SHFE 2301 lead closed down 0.03% or 5 yuan/mt at 15,735 yuan/mt, with open interest up 7,624 lots to 93,677 lots.

In the spot market, the smelters mostly delivered long-term orders approaching the end of the month, and the quotes of deliverable brands were firm amid relatively tight supply of spot goods. Follow-up attention shall be paid to the sudden outbreak of pandemic as well as its impact on the production and raw material procurement of lead-acid battery markets.

Zinc: The most-traded SHFE 2212 zinc closed down 2.63% or 640 yuan/mt at 23,690 yuan/mt, with open interest down 13,326 lots to 67,411 lots.

SHFE zinc led the declines over base metals amid hawkish stances of US Fed officials. The bulls have almost been digested as the consumption expectation failed to fully pay off, and SHFE zinc lacks upside momentum.

Tin: The most-traded SHFE 2212 tin closed down 1.25% or 2,250 yuan/mt at 178,450 yuan/mt, with open interest down 5,668 lots to 38,276 lots.

In the spot market, the smelters were less divergent in terms of market quotes in early trade, and only a few smelters did not quote. The spot premiums offered by the traders changed little from a day ago, and the spot market shipments slowed down. The downstream demand was slightly affected by rebounding prices once.

Nickel: The most-traded SHFE 2212 nickel closed up 0.15% or 300 yuan/mt at 198,230 yuan/mt, with open interest down 4,030 lots to 54,995 lots.

In the spot market, Jinchuan nickel was in premiums of 4,000-4,500 yuan/mt, with an average of 4,250 yuan/mt, down 500 yuan/mt from a day ago. NORNICKEL nickel was in premiums of 2,400-2,500 yuan/mt, with an average of 2,450 yuan/mt, down 100 yuan/mt from the previous trading day. SHFE nickel surged again after opening in the morning, and the spot market was muted with spot prices returning to a high level. For nickel briquette, the prices stood between 200,300-201,000 yuan/mt, up 3,650 yuan/mt on a daily basis.

[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.]