SMM Morning Comment For SHFE Base Metals October 19

SHANGHAI, October 19 SMM) –
Copper
Copper prices rebounded slightly as market expected Fed to keep interest rate unchanged
Data source: SMM
LME copper prices opened at $8020/mt and closed at $7992/mt in overnight trading, a gain of 0.39%, with the low-end of $7965/mt and the high-end of $8048.5/mt. Trading volume was 17,000 lots, and open interest stood at 268,000 lots. The most active SHFE 2311 copper contract prices opened at 66620 yuan/mt and finished at 66500 yuan/mt last evening, up 0.02%, with the low-end of 66380 yuan/mt and the high-end of 66780 yuan/mt. Trading volume was 17,000 lots, and open interest stood at 138,000 lots. On the macro front, the U.S. housing starts data released on Wednesday, though lower than expected, exceeded the previous value. In addition, Federal Reserve Governor Waller changed his tone and said that the Federal Reserve may need to continue to raise interest rates, but hinted that it supports staying on hold, and the U.S. dollar index rose. In terms of fundamentals, the overall market transactions in East China were relatively active yesterday, and the premiums rose accordingly. In addition, the warrants have not yet flowed into the market and are expected to gradually be offered for sale in the next two days. Inventories in South China have increased, and rising copper prices have reduced enthusiasm for transactions. But sellers still kept prices firm. On the consumption side, demand is expected to remain strong in the near term. Copper prices will weaken due to unstable market sentiment and high US dollar index.
Aluminum
Overnight, the most-traded SHFE 2311 aluminum contract opened at 18,965 yuan/mt, with its lowest and highest at 18,920 yuan/mt and 19,000 yuan/mt before closing at 18,955 yuan/mt, up 45 yuan/mt or 0.24% compared with the previous trading day. LME aluminum opened at $2,180/mt on Wednesday, with its high and low at $2,199/mt and $2,178.5/mt respectively before closing at $2,189/mt, an increase of $12/mt or 0.55%.
Recently, 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. Aluminum prices may remain high and volatile in the short term, and market players should pay close attention to overseas macro changes.
Lead
SMM Lead Morning Comments
Overnight, LME lead opened at $2,090/mt. The growth trend of LME lead stocks continued. LME lead fell by $2,100/mt, and finally closed at $2,090.5/mt, a decrease of 0.05%.
Overnight, the most active SHFE 2311 lead contract opened at 16,430 yuan/mt. Boosted by the reduction in lead warrants inventory, SHFE lead had a strong trend at the beginning of the day, reaching a maximum of 16,470 yuan/mt. The contract closed at 16430 yuan/mt, an increase of 0.4%. Open interest stood at 66314 lots, a decrease of 1488 lots from the previous trading day.
Zinc
SMM zinc morning comments
Data source: SMM
Overnight, LME zinc prices opened at $2421/mt, and closed at $2434/mt, up $10/mt or 0.41%. Trading volume decreased to 5282 lots, and open interest decreased 3692 lots to 212,000 lots. LME zinc inventory decreased by 1525 mt to 80325 mt, a drop of 1.86%. Overseas geopolitical risks have continued recently, and the rise in the US dollar has put pressure on it. However, overseas economies still show resilience, investors are cautious in trading, and LME zinc remains volatile.
The most active SHFE 2311 zinc contract prices opened at 21165 yuan/mt and closed at 21125 yuan/mt last evening, up 10 yuan/mt or 0.05%. The trading volume was down to 38577 lots, and open interest decreased 2214 lots to 77832 lots. Recent domestic economic data have exceeded expectations and market sentiment has improved. However, the supply side has increased, making investors cautious in trading, and the upside space for zinc prices is limited.
Tin
SHFE 2311 tin contract soared after the opening of yesterday night session. After reaching a high of 219,350 yuan/mt, it gradually fell back and finally closed at 218,830 yuan/mt.
Spot premiums and discounts were basically unchanged from yesterday. Small brand tin ingots were offered at premiums of 0-300 yuan/mt, premiums of 400-700 yuan/mt for delivery brands, premiums of 900-1,200 yuan/mt for Yunxi brands, and discounts of 300-500 yuan/mt for imported tin brands. The overall tin price yesterday maintained sideways at a high level, but downstream companies were less willing to purchase. Most trading companies reported that most of the shipments were few yesterday. The transaction volume was relatively flat.
Nickel
Overnight, the most-traded SHFE nickel contract opened at 149,760 yuan/mt, and closed at 149,530 yuan/mt, down 230 yuan/mt. Trading volume dropped by 12,568 lots, and open interest decreased by 3,398 lots.
On the macro front, raising interest rates was on the way, and market was still controversial about whether to it will happen later this year. Currently, prices of US dollar and gold continued to move upward, and commodities were under downward pressure. 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 decline slightly in the future.