SMM Evening Comments (Nov 25): Shanghai Nonferrous Metals Closed Mostly with Gains

SHANGHAI, Nov 25 (SMM) – Shanghai nonferrous metals closed mostly with gains as the recent market sentiment eased amid the frequent dovish signals from the US Fed.

Shanghai copper added 0.49%, aluminium fell 0.37%, lead slid 0.6%, zinc advanced 0.59%, tin jumped 1.06%, and nickel edged up 0.2%.

Copper: The most-traded SHFE 2301 copper closed up 0.49% or 320 yuan/mt at 65,170 yuan/mt, with open interest up 3,815 lots to 148,708 lots.

On the macro front, (1) US initial jobless claims for the week ending Nov 19 came in at 240,000, with a previous print of 223,000 and a forecast of 225,000. (Bullish ☆) (2) The monthly rate of US October durable goods orders recorded 1%, with a previous reading of 0.3% and a forecast of 0.40% (Bearish ☆)

In the spot market, most downstream players and traders are likely to stand on the sidelines next week approaching the end of the month. Nonetheless, as some market players have been busy making up the void concerning invoice amount for the front month, hence the transaction situation of goods with front-month and next-month invoices will be complete the opposite.

Aluminium: The most-traded SHFE 2301 aluminium closed down 0.37% or 70 yuan/mt at 18,895 yuan/mt, with open interest up 5,536 lots to 208,310 lots.

In the spot market, the downstream players ramped up the restocking activities on Friday, hence the transactions across the country were moderate. The spot sources available in Wuxi were tight amid low arrivals, while the traders were also active in picking up cargoes.

Lead: The most-traded SHFE 2301 lead closed down 0.6% or 95 yuan/mt at 15,640 yuan/mt, with open interest down 6,625 lots to 84,050 lots.

The traders quoted based on the market dynamics, and the transportation in some regions was restricted by the pandemic. The downstream players maintained purchases on rigid demand, but mainly sourced from nearby regions. The spot market revived slightly approaching the end of the week.

Zinc: The most-traded SHFE 2301 zinc closed up 0.59% or 140 yuan/mt at 23,700 yuan/mt, with open interest up 5,388 lots to 108,502 lots.

Market sentiment picked up with the frequent release of dovish speeches by the US officials. SMM zinc ingot social inventory across seven major markets in China fell 5,900 mt to 52,900 mt, which remained low. SHFE zinc is relatively resilient with support from the macro front and low inventory.

Tin: The most-traded SHFE 2212 tin closed up 1.06% or 1,940 yuan/mt at 184,270 yuan/mt, with open interest down 5,364 lots to 26,993 lots.

In the spot market, the smelters maintained their willingness to make quotes in early trade, and some adjusted their prices after making shipments with low prices. The premiums offered by the traders were stable in the morning, but the market sales were lacklustre, and only those quoting in discounts reported moderate sales. The downstream players still purchased on rigid demand.

Nickel: The most-traded SHFE 2212 nickel closed up 0.2% or 400 yuan/mt at 199,620 yuan/mt, with open interest down 7,564 lots to 40,522 lots.

In the spot market, Jinchuan nickel was in premiums of 4,000-4,200 yuan/mt, with an average of 4,100 yuan/mt, up 350 yuan/mt from a day ago. NORNICKEL nickel was in premiums of 2,500-2,600 yuan/mt, with an average of 2,550 yuan/mt, up 100 yuan/mt from the previous trading day. As SHFE remained high, the spot premiums changed little compared with yesterday, and the market transactions were muted. For nickel briquette, the prices stood between 199,300-199,900 yuan/mt, down 350 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.]