SMM Evening Comments (Mar 28): Shanghai Nonferrous Metals Closed with Gains on Abating Risk Aversion

SHANGHAI, Mar 28 (SMM) - Shanghai nonferrous metals closed with gains in day trading. On the macro front, the U.S. Federal Deposit Insurance Corporation announced that First Citizens Bank, who acquired Silicon Valley Bank after its failure, was slated to take over its deposits and loans. As such, risk aversion continued to cool, and the dollar index also weakened.

SHFE copper added 0.22%, aluminium gained 1.27%, lead inched higher 0.06%, zinc advanced 0.27%, tin expanded 2.23%, and nickel rose 0.66%.

Copper: The most-traded SHFE 2305 copper closed up 0.22% or 150 yuan/mt at 69,320 yuan/mt, with open interest up 238 lots to 171,323 lots.

In the spot market, the inventory in Guangdong continued to shrink due to low arrivals. Some cargo holders held prices firm, but downstream players were reluctant to restock amid rising copper prices. As a result, the poor transactions compelled suppliers to cut their offers. Yet, the spot prices rose again later when low-prices resources were sold out.

Aluminium: The most-traded SHFE 2305 aluminium closed up 1.27% or 235 yuan/mt at 18,690 yuan/mt, with open interest up 3,969 lots to 219,134 lots.

On the fundamentals, despite a slight recovery on the production side, domestic aluminium ingot social inventory continued to fall as downstream consumption continued to pick up. The short-term aluminium prices may go up, driven by improving fundamentals.

Lead: The most-traded SHFE 2305 lead closed up 0.06% or 10 yuan/mt at 15,420 yuan/mt, with open interest up 2,349 lots to 65,944 lots.

In the spot market, the prices quoted by goods holders were flat from yesterday. Meanwhile, some plants lowered the prices to stimulate on-demand purchases, but the transactions did not improve. The most active SHFE lead contract is expected to fluctuate narrowly with stable macro sentiment.

Zinc: The most-traded SHFE 2305 zinc closed up 0.27% or 60 yuan/mt at 22,575 yuan/mt, with open interest up 207 lots to 100,416 lots.

Zinc prices climbed today, and traders lowered the prices to promote sales. However, downstream enterprises refrained from purchasing since the prices were still high. The trading was quiet.  

Tin: The most-traded SHFE 2304 tin closed up 2.23% or 4,470 yuan/mt at 204,920 yuan/mt, with open interest down 5,944 lots to 31,035 lots.

Tin futures prices continued to rise sharply, and many smelters offered less firm quotes in the morning session with the desire to make shipment. However, the feedback from traders showed that the spot transactions were slack amid poor inquiries.  

Nickel: The most-traded SHFE 2305 nickel closed up 0.66% or 1,170 yuan/mt at 179,060 yuan/mt, with open interest up 4,162 lots to 71,936 lots.

In the spot market, Jinchuan nickel was quoted in premiums of 6,300-6,600 yuan/mt, with an average of 6,450 yuan/mt, down 150 from the previous trading day. NORNICKEL nickel was in premiums of 2,600-2,900 yuan/mt, with an average of 2,750 yuan/mt, up 100 yuan/mt from the prior trading day. The spot premiums declined on the approaching delivery of the front-month contract, while SHFE nickel prices continued to rally. For nickel briquette, the prices stood between 182,800-183,200 yuan/mt, down 750 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.]