SMM Morning Comment For SHFE Base Metals October 17

SHANGHAI, October 17(SMM) –
Copper
SMM copper morning comments
Data source: SMM
LME copper prices opened at $7983/mt and closed flat at $7984.5/mt in overnight trading, with the low-end of $7953/mt and the high-end of $8015/mt. Trading volume was 16,000 lots, and open interest stood at 275,000 lots. The most active SHFE 2311 copper contract prices opened at 66560 yuan/mt and finished at 66310 yuan/mt last evening, up 0%, with the low-end of 66200 yuan/mt and the high-end of 66560 yuan/mt. Trading volume was 20,000 lots, and open interest stood at 158,000 lots. On the macro front, Philadelphia Fed President Harker reiterated his remarks last Friday: Unless there is a turning point in the data, the Fed should keep interest rates stable. The US dollar index fell on Fed dovish tone. On the fundamentals, as of October 16, SMM copper inventory across major Chinese markets decreased by 3,200 mt from last Friday to 114,100 mt. There were not many imported copper arrivals in East China and there were many direct shipments to downstream customers. The arrivals of domestic copper were also relatively limited. In South China, due to the high enthusiasm of downstream replenishment, inventory dropped significantly. Given low copper prices, demand remained acceptable. Copper prices are expected to remain rangebound as the market is cautious.
Aluminum

Overall, external macro news disturbed market. The swinging expectations of short-term interest rate hikes and the intensification of the Palestinian-Israeli conflict added uncertainty to market. Domestic favorable policies continue to be issued, promoting economic recovery. Although social inventories gradually accumulated after the holiday, the total inventory was still at a historical low for the same period, which had not brought much negative effects on aluminum prices. In the medium to long term, aluminum supply and demand may maintain a tight balance, and aluminum prices are expected to fluctuate at high levels, with limited downside space.
Lead
SMM Lead Morning Comments
Overnight, LME lead opened at US$2,049.5/ton. During the Asian session, LME lead trading was flat, basically fluctuating between US$2,045 and US$2,055/ton. Entering the European session, concerns about conflicts in the Middle East escalated, and LME lead inventories increased to over 90,000 tons. LME lead plummeted to as low as US$2029/ton, setting a new low in nearly 4 months. Then the U.S. dollar reversed course and fell, basic metals generally rebounded, and LME lead finally closed at $2,077.5/ton, an increase of 1.29%.
The most active SHFE 2311 lead contract prices opened at 16135 yuan/mt last evening and finally closed at 16185 yuan/mt, up 0.15%. Open interest decreased 2577 lots to 79297 lots.
Zinc
SMM Zinc Morning Comment
Overnight, LME zinc opened at $2457/mt, hitting a high of $2471/mt and a low of $2435/mt respectively, and closed at $2445.5/mt, down $1.5/mt or 0.06%. Trading volume decreased to 5731 lots, and open interest fell 2412 lots to 218,000 lots. LME zinc inventories decreased by 3325 mt to 83450 mt, a drop of 3.83%.
The most active SHFE 2311 prices opened at 21295 yuan/mt and lost 10 yuan/mt or 0.05% to settle at 21195 yuan/mt in overnight trading with the high-end of 21355 yuan/mt and the low-end of 21170 yuan/mt. Trading volumes decreased to 42283 lots and open interest fell 1345 lots to 90120 lots. According to the SMM survey, smelters basically maintained high output in October, while social inventories were slightly reduced yesterday.
Tin

SHFE 2311 tin contract surged rapidly after the opening of yesterday night session. After reaching a relatively high of 218,500 yuan/mt, it maintained sideways and finally closed at 218,250 yuan/mt, up 0.56%.
Spot premiums and discounts were basically unchanged from yesterday. Small brand tin ingots were offered at premiums of 0-400 yuan/mt, premiums of 400-700 yuan/mt for delivery brands, premiums of 900-1,200 yuan/mt for Yunxi brands, and discounts of 300-400 yuan/mt for imported tin brands. Yesterday, tin price rose again, and there is almost no purchase willingness of downstream. Most trading companies reported that most of the shipments were zero or less. The transactions in spot market was sluggish.
Nickel

Overnight, the most-traded SHFE nickel contract opened at 151,820 yuan/mt, and closed at 152,380 yuan/mt, up 1,160 yuan/mt. Trading volume rose by 34,398 lots, and open interest decreased by 338 lots.
On the macro front, CME Group’s Fed Watch Tool showed that the market expected the probability of the Federal Reserve maintaining current interest rates in November to be 85.7%, but current US inflation had not yet reached the ideal level. In the fundamentals, the demand for domestic electrowinning nickel remained stable and the purchase amount of Jinchuan nickel plate was acceptable. Norilsk nickel transactions in spot market were sluggish and demand dropped. In summary, it is expected that nickel prices will continue to rebound slightly in the future.