SMM Evening Comments (Mar 3): Shanghai Nonferrous Metals Closed Mostly with Losses on Aggravating Rate Hike Concerns

SHANGHAI, Mar 3 (SMM) – Shanghai nonferrous metals closed mostly with losses in day trading. On the macro front, the US initial jobless claims pointed to a still strong labour, sparking concerns over follow-up rate hike path. The US dollar also remained high as a result.

SHFE copper slid 0.21%, aluminium added 0.59%, lead fell 0.16%, zinc dropped 0.23%, tin shed 3.51%, and nickel lost 2.14%.

Copper: The most-traded SHFE 2304 copper closed down 0.21% or 150 yuan/mt at 69,820 yuan/mt, with open interest down 2,474 lots to 152,202 lots.

In the spot market, falling copper prices attracted some downstream buyers, and goods circulating in the market dropped especially when shipments from the smelters fell. The sources of low-priced and registered hydro-copper were even scarce.

Aluminium: The most-traded SHFE 2304 aluminium closed up 0.59% or 110 yuan/mt at 18,775 yuan/mt, with open interest up 139 lots to 195,843 lots.

In terms of fundamentals, aluminium smelters in Yunnan have completed their production reduction, while the resumption of aluminium production in Sichuan, Guizhou and other places is relatively slow, thus the pressure on the short-term supply side has eased. The pace of accumulation of aluminium ingots has slowed down during the week. On the demand side, the operating rates of aluminium processing enterprises has risen steadily amid consumption recovery, but the overall increase was limited. It is necessary to continue to pay attention to the impact of interest rate hikes, the pace of demand recovery, and the trend of inventory changes. In the short term, aluminium prices will remain rangebound.

Lead: The most-traded SHFE 2304 lead closed down 0.16% or 25 yuan/mt at 15,295 yuan/mt, with open interest up 3,707 lots to 59,374 lots.

The cargo holders were less interest in selling as SHFE zinc dropped, and supply in the spot market dropped further as secondary lead smelters struggled to break even. The downstream players still purchased on demand, while some bought on dips.

Zinc: The most-traded SHFE 2304 zinc closed down 0.23% or 55 yuan/mt at 23,475 yuan/mt, with open interest down 981 lots to 86,290 lots.

Zinc price dropped today, and low prices attracted downstream players, accompanying improving market inquiries. The transactions also picked up.

Tin: The most-traded SHFE 2304 tin closed down 3.51% or 7,260 yuan/mt at 199,500 yuan/mt, with open interest up 291 lots to 68,713 lots.

In the spot market, some smelters still held the prices firm, while the traders were active in making shipments. The spot prices of refined tin brands stood stable. The downstream players were relatively active in making inquiries, and the transactions picked up as well, according to the traders.

Nickel: The most-traded SHFE 2304 nickel closed down 2.14% or 4,090 yuan/mt at 187,090 yuan/mt, with open interest down 5,510 lots to 81,040 lots.

In the spot market, Jinchuan nickel was in premiums of 7,300-7,500 yuan/mt, with an average of 7,400 yuan/mt, up 150 yuan/mt from the previous trading day. NORNICKEL nickel was in premiums of 4,000-4,200 yuan/mt, with an average of 4,100 yuan/mt, down 900 yuan/mt. The spot premiums showed signs of stabilising, but the upstream players were less willing to sell. The spot market transactions weakened. For nickel briquette, the prices stood between 188,800-189,100 yuan/mt, down 3,350 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.]