SHANGHAI, October 27(SMM) –
Copper
SMM Copper Morning Comment
LME copper prices opened at $8034/mt and closed at $7988/mt in overnight trading, a gain of 0.04%, with the low-end of $7972/mt and the high-end of $8034/mt. Trading volume was 15,000 lots, and open interest stood at 270,000 lots. The most active SHFE 2312 copper contract prices opened at 66680 yuan/mt and closed at 66460 yuan/mt last evening, a drop of 0.26%, with the high-end of 66680 yuan/mt and the low-end of 66440 yuan/mt. Trading volume was 25,000 lots, and open interest stood at 154,000 lots. On the macro front, the initial annualized quarterly rate of real GDP in the United States in the third quarter was 4.9%, a new high since the fourth quarter of 2021. Yellen said higher yields were a sign of a strong economy. Traders generally believe the Fed will keep interest rates on hold for the rest of the year. In addition, the European Central Bank kept its three major interest rates unchanged, in line with market expectations, and reinvestment will continue until at least the end of next year. Lagarde said that the suspension of interest rate increases does not mean that interest rates will not be raised in the future. In terms of fundamentals, the spot market transactions in East China were relatively active yesterday. The lower copper prices did not cause fear of downstream buyers. Spot premiums and discounts increased. Yesterday's spot market transactions in South China were lukewarm. Both inventories and copper prices fell, but that failed to improve the enthusiasm for downstream purchasing. In terms of consumption, if copper prices remain low, it is expected that the demand can be resilient. In terms of price, it is expected that copper prices will continue to be under pressure from the US dollar.
Aluminum
Overnight, the most-traded SHFE 2312 aluminum contract opened at 19000 yuan/mt, with its low and high at 18885 yuan/mt and 19000 yuan/mt before closing at 18900 yuan/mt, down 100 yuan/mt or 0.53%. LME aluminum opened at $2214/mt on Thursday, with its low and high at $2193/mt and $2228/mt respectively before closing at $2196.5/mt, up 0.7%. There are many macro disturbing factors. The Palestinian-Israeli conflict have intensified market uncertainty. Operating aluminum capacity in China is now 42.97 million mt, close to a peak, meaning no significant growth will be seen in short term. Downstream orders improved after the National Day holiday, but fell short of expectations. Aluminum ingot inventory is not expected to enter a downward trend any time soon. Aluminum prices are expected to move rangebound in the short term.
Lead
SMM lead morning comment
SHANGHAI, Oct 27 (SMM) -
LME lead open at $2085/mt and went downward during the Asian trading hours yesterday, declining to $2074.5/mt during the European trading hours. It finally dropped and closed at $2094.5/mt, up $14.5/mt or 0.70%.
The most active SHFE 2312 lead contract prices opened at 16155 yuan/mt and touched 16135 yuan/mt before closing at 16190 yuan/mt, down 20 yuan/mt or 0.12%.
Zinc
SMM Zinc Morning Comment
Overnight, LME zinc opened at $2475/mt and closed down $49/mt or 1.98% at $2430/mt. The trading volume was 8629 lots, and open interest lost 161 lots to 201,000 lots. The U.S. GDP surged by 4.9% year-on-year in the third quarter, with the economy growing at the fastest rate in the past two years. Market concerns about subsequent interest rate hikes grew, and risk aversion increased.
Last evening, the most active SHFE 2312 zinc contract prices opened at 20990 yuan/mt and closed at 20945 yuan/mt, down 160 yuan/mt or 0.76%. Trading volume stood at 59,000 lots, and open interest gained by 581 lots to 82,000 lots. US GDP data shows that the economy is quite resilient, and the Federal Reserve may keep interest rates at restrictive levels for longer than expected. The domestic market was affected by macro sentiment and followed the LME market down.
Tin
SHFE 2312 tin contract fell to 211760 yuan/mt overnight and closed at 211110 yuan/mt, down 1.71%. Yesterday, spot premiums and discounts in domestic spot market for various domestic tin ingot brands changed little. Small brand tin ingots were offered at premiums of 0-300 yuan/mt, versus premiums of 300-600 yuan/mt for delivery brands, premiums of 900-1,000 yuan/mt for Yunxi brand, and discounts of 500-800 yuan/mt for imported brand tin ingots. Overall, the spot market transactions yesterday were relatively flat.
Nickel
Overnight, the most-traded SHFE nickel contract opened at 148980 yuan/mt, and closed at 146990 yuan/mt, down 910 yuan/mt. Trading volume fell by 6048 lots, and open interest decreased by 10227 lots. On the macro side, the dovish speeches of Federal Reserve officials have been frequent. The expectation for the Federal Reserve to raise interest rates has continued to cool down. Market expectations for the interest rate range to remain unchanged in November and December rose to 89.6% and 70.5%. Demand in spot market declined yesterday. Nickel price is expected to rebound slightly.