SMM Morning Comment For SHFE Base Metals On June 27

SHANGHAI, June 27 (SMM) –
Copper
Overnight LME copper opened at $9556 /mt, touching a low of $9508/mt during the session, and finally closed at 9595 /mt at the end of the session, with a trading volume of 21,000 lots and a position of 326,000 lots. Overnight, the most active SHFE 2408 copper contract opened at 78420 yuan/ton, touched above 78420 yuan/ton at the beginning of the session, and then fluctuated downward, touching a low of 77740 yuan/ton during the session, and finally closed at 78080 yuan/ton at the end of the session, an increase of 0.08%, with a trading volume of 49,000 lots and a position of 181,000 lots. In terms of macroeconomics, the Federal Reserve said that all 31 banks tested passed the Federal Reserve's annual stress test, which helped the market ease the sentiment of the Federal Reserve's insistence on high interest rates. The US dollar index still maintains a high level, which suppresses copper prices. Pay attention to the labor data and inflation data to be released tonight, which will provide guidance for copper prices. In terms of fundamentals, the copper price fell and did not cause downstream replenishment. This is mainly because demand has entered the off-season, new orders are relatively small, and downstream companies have no motivation to replenish. In terms of price, it is expected that there will still be pressure on the copper price.

Aluminum
Market: The overnight SHFE 2408 most-traded aluminum contract opened at 20,320 yuan/mt, with a high of 20,380 yuan/mt, a low of 20,250 yuan/mt, and closed at 20,300 yuan/mt, up 70 yuan/mt, an increase of 0.35%. The previous trading day, LME Aluminum opened at $2,496/mt, with a high of $2,516/mt, a low of $2,482/mt, and closed at $2,511.5 /mt, up $14.97/mt, an increase of 0.6%.

Summary: On the macro level, the Federal Reserve is hawkish, the interest rate cut may be postponed until next year, and there may be a rate hike depending on inflation data; domestically, the trade-in policy continues to exert force, new real estate policies are being introduced in various places, aiming to further promote domestic consumption. On the fundamental, domestic aluminum production capacity maintains high, boosted by the rebound of aluminum billets processing fees, the proportion of aluminum alloying rebounded, and the industry's ingot production decreased. Affected by the pullback in aluminum prices, the daily inventory of aluminum ingots slightly decreased, but the social inventory of aluminum ingots is still at a high level for the same period in history, and the process of de-stocking still faces certain resistance. At the same time, according to SMM research, new orders in industries such as photovoltaics and automobiles are not ideal, and the operating rate of aluminum processing companies will maintain a low level in the short term. Under the weak macro background, coupled with the weakening trend of downstream consumption expectations, the market capital sentiment maintains a wait-and-see attitude, SMM expects that aluminum prices may show a wide range of fluctuations in the short term.

LeadOvernight, LME lead opened at $2212.5/ton and fluctuated sideways in the Asian session; entering the European session, due to the rise and then decline of the US dollar index, LME lead briefly fell and then rose to $2218.5/ton. In the late trading, short positions increased and LME lead weakened and fell to $2187/ton, and finally closed at $2191.5/ton, a drop of 0.93%.
Overnight, the most active SHFE 2408 lead contract opened high at 19265 yuan/ton, touched the high of 19340 yuan/ton at the beginning of the session, and fluctuated around 19265 yuan/ton after a slight decline. The lowest during the period was 19215 yuan/ton, and prices finally closed at 19265 yuan/ton, an increase of 0.73%.

Zinc
Overnight, LME zinc opened at $2863.5/ton and touched a high of $2955.5/ton. It finally closed up at $2944/ton, up $82/ton, or 2.87%. The trading volume increased to 13060 lots, and the position increased by 1895 lots to 232,000 lots. Overnight LME zinc inventory decreased by 350 tons to 239,850 tons, a decrease of 0.15%, and LME inventory recorded a decrease. Affected by the favorable domestic policies, macro sentiment improved, and the overall LME zinc moved up. Overnight, the most active SHFE 2408 zinc contract opened at 24,300 yuan/ton and fell to 24,065 yuan/ton. It finally closed up at 24,245 yuan/ton, up 485 yuan/ton, an increase of 2.04%. The trading volume decreased to 162,000 lots, and the position increased by 2,336 lots to 97,332 lots. Domestic real estate has issued favorable policies again, the macro atmosphere has improved, and the overall zinc price has risen rapidly under the expectation of production cuts by domestic smelters.

Tin
The closing price of the most-traded SHFE tin futures last night was 266,510 yuan/mt, down 70 yuan/mt, with a decline of 0.03%, the highest was 268,000 yuan/mt, and the lowest was 264,160 yuan/mt.
Yesterday, spot premiums and discounts in domestic spot market for various tin ingot brands were as below. Small brand tin ingots were offered at premiums of 0 yuan/mt over SHFE 2407 tin contract, versus premiums of 0-500 yuan/mt for delivery brands and premiums of 600-800 yuan/mt for Yunxi brand. The price of SHFE tin was weak in the morning session yesterday, and the purchasing intention of downstream companies increased, and the trading was quite active. The SHFE tin warrants decreased by 53 mt to 15,052 mt, while the LME tin inventory increased by 55 mt to 4,780 mt.

Nickel
On June 26, Jinchuan nickel was at a premium of 1,800-2,100 yuan/mt, with an average of 1,950 yuan/mt, a decrease of 100 yuan/mt compared to the previous trading day. Russian nickel was at a discount of 200 yuan/mt to a premium of 100 yuan/mt, with an average discount of 50 yuan/mt, flat compared with the previous trading day. The market fluctuated at recent lows in the morning. The shortage of electro-deposited nickel in the spot market continued, and the premiums and discounts for various brands remained strong. The price of nickel briquette was 132,000-132,700 yuan/mt, a decrease of 450 yuan/mt compared to the previous trading day. The price gap between nickel briquette and nickel sulphate was approximately 1,668 yuan/mt (nickel sulphate prices were 1,668 yuan/mt lower than nickel briquette prices).