Editorial

SGE notice on gold and silver forward curves

Date Nov 19 2018 17:24:40Source:SHMET

SHANGHAI, Nov 19 (SHMET) – In order to further meet the market inquiry needs and to facilitate market development, Shanghai Gold Exchange (SGE) will continue to promote the building of market benchmark curve. SGE hereby notifies related matters as follows,

1.      To release gold forward curve to the market

SGE will release the gold forward curve through its official website and market system from November 30, 2018. SGE members can also search relevant information through the inquiry transaction system and the member service platform.

2.      To release the silver forward curve to participating banks with inquiry businesses

SGE will release silver forward curve to participating banks with inquiry businesses through inquiry transaction system from November 30.

3.      To approve SPD Bank to be a pilot member of the silver forward curve quotation group

SGE approves Shanghai Pudong Development Bank as a pilot member of the silver forward curve quotation group, and the bank will start to quote on December 3, 2018.

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Smelting plants turn to exports with larger import loss

Date Nov 19 2018 17:08:16Source:SHMET

SHANGHAI, Nov 19 (SHMET) –The price gap between SX-EW copper and high-quality copper was quite obvious with SX-EW copper trading at discounts of around 200 yuan/mt, while the latter was at premiums of 100 yuan/mt. Trades were made among traders. Overall transactions were thin.

Smelting plants quickened their pace of exporting given larger import loss. Apart from deliveries of long-term contracts, most exports were profitable.

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Nickel market remains weak with sluggish consumption

Date Nov 19 2018 16:53:17Source:SHMET

SHANGHAI, Nov 19 (SHMET) – Spot nickel prices were offered at 94,500-105,700 yuan/mt on Monday November 19, remaining unchanged. Spot premium for Jinchuan nickel came to 11,100 yuan/mt compared with Wuxi 1812 contract, and 12,520 yuan/mt compared with SHFE nickel three-month contract. Russian nickel saw discount of 100 yuan/mt compared with Wuxi 1812 contract, and was at a premium of 1320 yuan/mt over with SHFE nickel 1901 contract.

SHFE nickel slumped over 1,000 yuan/mt in the morning trading and hitting new low of 93,100 yuan/mt. At spot market, despite of sustained weakness, inquires of some traders remained stable. Basically, they preferred to buy low-priced resources. But if the price drop extends, traders may become hesitate in purchasing. Jinchuan Group tried to hold price and did not revise ex-works price in the morning.

On macro side, China has delivered a written response to US demands for wide-ranging trade reforms, but LME copper saw flat rally last weekend. China-US trade negotiation remained uncertain, which will weigh on industrial metals’ prices. LME nickel moved down in a range bound, paring earlier gains.

Philippine environment department gave a reprieve to most mines it ordered shut more than a year ago that could help stabilize the outlook for nickel supply. Nickel price tumbled on that news. However, Jinchuan Group held its ex-works price at 105,000 yuan/mt. Russian nickel was traded at discount with ample resources. The price gap between Jinchuan nickel and Russian nickel was expected to keep above 10,000 yuan/mt. Some downstream buyers remained cautious, dampening overall transactions.  

NPI (8-12%) was offered at 1015-1045 yuan/Ni, NPI (7-10%) was offered at 1010-1030 yuan/Ni, flat from previous trading day, based on spot offers at SHMET. Expectation of higher production remained as a significant hinder of price growth. In addition, trades were thin and downstream was about to enter off-season. Therefore, the weakness may remain unchanged within this year. Stainless steel offers edged lower, while inventories amounted. Besides, consumption from infrastructure construction and real estate will gradually halt by the end of the year. Supports for price will be weaker in short term.

To sum up, macro side showed no favorable news in short run. Uncertainty from China-US trade negotiation, Philippine mines’ supply increase, plus with weak fundamentals, nickel market will remain weak for a while. Also, current sluggish consumption could barely keep the market warm.

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Zinc price edges up

Date Nov 19 2018 16:40:07Source:SHMET

SHANGHAI, Nov 19 (SHMET) – Zinc price edged up generally on November 19. Cargo holders were active in sales on November 19’s morning trading hours. Few offers for SMC zinc ingots were heard in the market. Market trades were moderate as spot premium rose and downstream producers made active purchase.

Spot premium for domestic ordinary zinc ingots edged down after the market opening up. The premium, however, rose during the second trading session as cargo holders were reluctant to sell and traders were active in inquiries. The rising premium increased the offers from cargo holders. Zinc price is likely to remain strong in the short term after continuous rise.

Spot zinc prices were offered at 22,000-22,100 yuan/mt, up 60 yuan/mt from the previous trading day, and at a premium of 120-220 yuan/mt compared with SHFE zinc 1812 contract. 1# zinc was offered at 21,940-22,040 yuan/mt, up 60 yuan/mt from a day earlier, and at a premium of 60-160 yuan/mt compared with SHFE zinc 1812 contract. Shuangyan and Huize brand zinc ingots were offered at a premium of 40 yuan/mt against 1812 contract. For imported brands, Spanish, Namibian and Brazilian zinc ingots were offered at a premium of around 10 yuan/mt against SHFE zinc 1812 contract.

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SHFE aluminum rebounds with limited upside

Date Nov 19 2018 16:10:35Source:SHMET

SHANGHAI, Nov 19 (SHMET) – Trading of aluminum was moderate on November 19, as downstream plants procured as required and middlemen were not enthusiastic to purchase amid sufficient market supply.

SHFE aluminum recovered with limit upside. SHFE 3M aluminum rose strongly today and closed up 0.62%.

Aluminum supply in the near future could be curbed due to refineries’ maintenance and output reduction in Zhengzhou, Luoyang, Jiaozuo of Henan province and Zibo of Shandong province in the heating season from November 15 to next year’s March 15.

Aluminum futures price was hard to rise due to bleak downstream demands, such as weak real estate and automobile industries.

Aluminum inventory still held at high level, though it dropped below 1.5 million mt.

In the Shanghai spot market, aluminum was quoted at 13,730 yuan/mt to 13,770 yuan/mt today, up 90 yuan/mt. Spot aluminum traded at a discount of 60 yuan/mt to 20 yuan/mt against SHFE 1812 aluminum contract.

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