SMM Evening Comments (Mar 13): Shanghai Nonferrous Metals Closed Mostly with Losses on Higher-than-expected US Non-farm Payrolls

SHANGHAI, Mar 13 (SMM) - Shanghai nonferrous metals closed mostly with losses in day trading. On the macro front, the US non-farm payrolls after seasonal adjustment came in at 311,000, higher than the expected 205,000. The US unemployment rate in February recorded 3.6%, higher than the previous print of 3.4%. The collapse of Silicon Valley Bank weighed on US dollar index.

SHFE copper added 0.19 %, aluminium gained 0.38%, lead edged down 0.10%, zinc declined 0.45%, tin dropped 0.47%, and nickel shed 2.65%.

Copper: The most-traded SHFE 2304 copper closed up 0.19% or 130 yuan/mt at 69,270 yuan/mt, with open interest down 1,581 lots to 145,271 lots.

In the spot market, goods holders still held prices firm amid the backwardation structure of SHFE copper near-month contract, but downstream enterprises mainly purchased as needed. The inquiries improved, but transactions declined.

Aluminium: The most-traded SHFE 2304 aluminium closed up 0.38% or 70 yuan/mt at 18,435 yuan/mt, with open interest down 2,509 lots to 193,559 lots.

In terms of fundamentals, the positive impact from aluminium production reduction in Yunnan has been basically digested by the market. Downstream production was recovering slowly in the peak season, and social inventories of aluminium ingots have not entered destocking cycle. Lower alumina prices diminished cost support to aluminium prices, which may fluctuate weakly in the short term.   

Lead: The most-traded SHFE 2304 lead closed down 0.10% or 15 yuan/mt at 15,150 yuan/mt, with open interest up 1,435 lots to 69,698 lots.

In the spot market of secondary lead, most enterprises were still reluctant to quote, leading to thin trades in the spot market. The falling lead prices caused secondary lead prices to stay firm, but downstream lead-acid battery enterprises still preferred primary lead due to rather narrow price spread.  

Zinc: The most-traded SHFE 2304 zinc closed down 0.45% or 105 yuan/mt at 22,985 yuan/mt, with open interest up 548 lots to 85,310 lots.

As zinc prices dropped today, downstream buyers were boosted to increase purchases, but traders were cautious in quoting. The market transactions improved slightly.

Tin: The most-traded SHFE 2304 tin closed down 0.47% or 890 yuan/mt at 188,880 yuan/mt, with open interest up 1,793 lots to 77,521 lots.

As tin prices hover at lows, most smelters were tough on prices and held back from selling. Most downstream enterprises already finished restocking last Friday, and others took wait-and-see stance based on bearish sentiment. I

Nickel: The most-traded SHFE 2304 nickel closed down 2.65% or 4860 yuan/mt at 178,300 yuan/mt, with open interest down 5,976 lots to 75,836 lots.

In the spot market, Jinchuan nickel was quoted in premiums of 6,500-7,700 yuan/mt, with an average of 7,100 yuan/mt, up 200 yuan/mt on a daily basis. NORNICKEL nickel was in premiums of 2,500-2,600 yuan/mt, with an average of 2,550 yuan/mt, up 50 yuan/mt. Nickel futures continued to fluctuate while spot prices barely changed. The trading in the market was slack. For nickel briquette, the prices stood between 176,900-177,900 yuan/mt, down 5,150 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.]