Editorial

Poor data and trade frictions continue to depress nickel market

Date Oct 17 2018 10:08:19Source:SHMET

SHANGHAI, Oct 17 (SHMET) – Increasing supplies are likely to weigh on high premiums in nickel market. Buyers will continue to purchase on demand, and transactions will remain stable.

SHFE three-month nickel closed at 102,790 yuan/mt, down 850 yuan/mt or 0.82%. While demand outlook from steel market looks strong in the long term, market participants now remain cautious amid the ongoing macro uncertainty. 

China’s PPI slowed for three consecutive months, and domestic stock market was also weak. These, together with concerns about global growth, trade tensions, and rising US interest rates weighed on base metals market in overnight trading.

 

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SHFE aluminum to rally slightly

Date Oct 17 2018 09:38:22Source:SHMET

SHANGHAI, Oct 17 (SHMET) –SHFE aluminum is expected to have a modest rebound on October 17 after testing 14,000 yuan/mt. However, the market will remain weak in the short term.

SHFE near-term aluminum contracts were higher than its forward contracts, but high inventories provided adequate spot supply. After price declines in one and a half months, traders held offers firm, but middlemen were cautious about purchases.


SHFE 1812 contract opened at 14,235 yuan/mt in yesterday’s night trading session and closed at 14,315 yuan/mt, up 95 yuan/mt or 0.67%. Transactions stood at 73,156 lots, and position reduced by 140 lots to 222,132 lots.


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Zinc import losses grow slightly, with thin trades

Date Oct 16 2018 18:11:55Source:SHMET

SHANGHAI, Oct 16 (SHMET) –Import losses of zinc increased slightly on October 16, andimported goods were offered at a larger discount against domestic ordinary-brand cargoes. Few inquiries were heard in the import market.

Premiums for B/L Shanghai stood at $200-$230/mt cif and those for warrants in Shanghai bonded warehouse quoted at $220-$250/mt, unchanged from October 15.

LME cash aluminum was at a lower backwardation of $27.5/mt against LME 3M aluminum. For brands not exempted from customs tariff, the SHFE /LME cash price  ratio came in at 8.66, and at 8.74 for duty-free Australia, South Korea brand zinc ingots, a small drop from a day earlier. For brands not exempted from customs tariff, spot import losses stood at 297 yuan/mt, and 1,024 yuan/mt in forward import. For duty-free Australia, South Korea brand products, spot import losses registered at 111 yuan/mt, and 1,040 yuan/mt in forward import.

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Falling nickel prices depress trading sentiment

Date Oct 16 2018 18:11:20Source:SHMET

SHANGHAI, Oct 16 (SHMET) – Spot offers held largely unchanged on Tuesday from a day earlier, with moderate trades. Lower nickel prices are likely to dent trading sentiment. Spot import losses shrank further, but losses in forward month continued to expand. Premiums for under bill of lading in Shanghai stood at $200-280/mt cif and those for warrants in Shanghai bonded warehouse quoted at $220-280/mt cif.

The SHFE Spot/LME 3M was at 8.36 and that for 3M SHFE/LME 3M at 8.22. Russian nickel registered an import loss of 156 yuan/mt in spot market (2%of import tax) and a loss of 2,241 yuan/mt in forward market.

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SHFE lead consolidates and zinc prices fall again

Date Oct 16 2018 18:01:18Source:SHMET

Spot market

SHANGHAI, Oct 11 (SHMET)  –  Lead: Shanghai spot lead mainstream offer is at 18,990-19,240 yuan/mt, down 10 yuan / mt from the previous trading day, which has a premium 150 – 400 yuan / mt compared with 1811 contract. Jinsha lead quoted with a premium of 400 yuan/mt compared with 1811 contract, with fewer transactions. Nanfang brand lead quoted with a premium of 150 yuan/mt compared with 1811 contract. Regenerated refined lead to the factory is 18,900 yuan/mt. SHFE three-month lead contract opened higher on October 16 and then trended lower, ending the rising trend for last seven days. On October 14 and 15, the market trading volume has been greatly reduced, and the market increased its sentiment of stepping away from the market. Shanghai market traders are still quoting acceptably, but the downstream purchasing enthusiasm is low, and there is a price but no sales. 



Zinc: Shanghai spot zinc quotation of 0# zinc is at 20,340-23,140 yuan/mt, down 310 yuan/mt from the previous trading day, having s premium of 610-710 yuan/mt compared with SHFE zinc 1811 contract. The quotation of 1# zinc is at 22,980-23,080 yuan/mt, down RMB310 yuan/mt from the previous trading

Day, having a premium of 550-650 yuan/mt compared with SHFE zinc 1811 contract. In terms of imported zinc brand, SMC zinc ingot quoted with a premium of around 450-550 yuan/mt compared with 1811 contract and YP zinc ingots has a premium of 400 yuan/mt compared with 1811 contract. Spanish zinc ingot quoted with a premium of around 300 yuan/mt compared with 1811 contract. On the morning of October 16, the cargo holders actively quote. The initial premiums and discounts posted were basically the same as yesterday's, but the downstream is still in a wait-and-see mood. There were only a small amount of transactions in online prices with small discount. After that, the cargo holders continued to cut the premium, the downstream enquiries gradually increased, the market trading atmosphere was more active, and the transaction improved.

 

SHMET comments:

SHFE lead was quickly pulled up by the foreign market, but the upside momentum on October 15 and 16 was obviously insufficient, and the market activity was greatly reduced. The downstream only maintained a small amount of purchases according to their needs, and the spot trade market was not optimistic. Overall, the market participants reduced operations and is sitting on the sidelines.


On October 16, zinc decline expands, and the spot zinc price continues to fall. After the end of the October contract, the spot price quoted with a larger premium compared with 1811 contract, but the high premium was lowered after the poor transaction. After a sharp decline for two consecutive days, the zinc 1811 contract funds left the market in the process of transferring to the distant month contract. In the short term, the price of zinc may be adjusted mainly by fluctuations.

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Edited by SHMET
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