SMM Evening Comments (Mar 15): Shanghai Nonferrous Metals Closed Mostly with Gains on Acceptable US CPI Reading

SHANGHAI, Mar 15 (SMM) - Shanghai nonferrous metals closed mostly with gains in day trading. On the macro front, the seasonally unadjusted February CPI for February recorded 6%, which was in line with market expectations. This, coupled with the failure of Silicon Valley Bank, caused the Fed to reconsider the rate hikes. The probability of a 25-bp rate hike in March rose to 80%.

SHFE copper added 0.57%, aluminium gained 0.46%, lead improved 0.23%, zinc lost 0.63%, tin gained 0.09%, and nickel shed 0.8%.

Copper: The most-traded SHFE 2304 copper closed up 0.57% or 390 yuan/mt at 68,660 yuan/mt, with open interest down 2,708 lots to 139,125 lots.

In the spot market, most traders took a wait-and-see stance when front-month contract was delivered today. Goods holders mainly quoted flat against the next-month contract. The appreciation of RMB contributed to a slight recovery of copper import losses.

Aluminium: The most-traded SHFE 2304 aluminium closed up 0.46% or 85 yuan/mt at 18,375 yuan/mt, with open interest down 5,469 lots to 182,687 lots.

On the macro level, the US CPI was in line with expectations, thus the downward pressure on non-ferrous metals has eased. On the fundamentals side, aluminium production cuts tightened supply in the south China market. Downstream demand has gradually picked up, driving social stocks to fall. Aluminium prices are expected to move rangebound.  

Lead: The most-traded SHFE 2304 lead closed up 0.23% or 35 yuan/mt at 15,260 yuan/mt, with open interest down 4,140 lots to 56,203 lots.

The SHFE 2303 lead contract was delivered today, so the goods holders were tough on prices with scarce supply in the market. The secondary lead smelters were keen on selling, but downstream enterprises still preferred primary lead due to its insufficient supply. The transactions in the spot market were average.

Zinc: The most-traded SHFE 2304 zinc closed down 0.63% or 145 yuan/mt at 22,740 yuan/mt, with open interest down 191 lots to 82,506 lots.

As zinc prices consolidated today, the discounts were stable. But the market transactions thinned as downstream buyers’ enthusiasm to purchase declined today.

Tin: The most-traded SHFE 2304 tin closed up 0.09% or 160 yuan/mt at 186,300 yuan/mt, with open interest down 3,499 lots to 68,035 lots.

In the spot market, most smelters stood on the sidelines when tin prices moved sideways. The spot discounts were basically flat from yesterday. The SHFE warrants of nickel dropped by 57 mt to 8,733 mt.

Nickel: The most-traded SHFE 2304 nickel closed down 0.8% or 1,420 yuan/mt at 176,560 yuan/mt, with open interest down 804 lots to 68,125 lots.

In the spot market, Jinchuan nickel was quoted in premiums of 7,000-7,500 yuan/mt, with an average of 7,250 yuan/mt, flat from the previous trading day. NORNICKEL nickel was in premiums of 2,300-2,600 yuan/mt, with an average of 2,450 yuan/mt, up 50 yuan/mt. The delivery of SHFE 2303 contract discouraged upstream enterprises from selling, resulting in thin transactions. For nickel briquette, the prices stood between 180,000-181,000 yuan/mt, up 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.]