The overall weakness of non-ferrous metals nickel prices fell sharply
Recently, the trend of non-ferrous metals is generally weak. According to analysts, on the macro front, the Fed’s latest interest rate minutes emphasized its determination to fight inflation and aggravated the market’s concerns about the US’s long-term recession expectations; after experiencing the impact of the epidemic, some cities in China have recovered well, which has boosted market confidence. This also has a more obvious reaction in the stock market.
For non-ferrous metals, Sun Weidong, a senior non-ferrous analyst at the Orient Securities Derivatives Research Institute, said that the consumer side is facing the reality of seasonal weakening in the short term, which is reflected in the gradual accumulation of inventory during the Spring Festival. The previous low inventory has weakened the price support . “It is expected that non-ferrous metal prices will face certain realistic pressure before the peak consumption season. It is too early to trade consumption recovery after the Spring Festival.” He said, but in the long run, with the gradual easing of the domestic epidemic and the effects of domestic economic policies Gradually, the consumption expectations after the Spring Festival are also relatively optimistic, and the recent price drop provides a better point for doing more in the later stage.
As far as metal nickel is concerned, according to SMM news, the electrolytic nickel products entrusted by Qingshan to a new energy company in Hubei have been officially produced. The preliminary design production capacity is 1,500 tons per month, and some volume will be released in January. “The biggest difference between electrolytic nickel and electrolytic nickel is that before the former enters the electrowinning stage, the nickel raw material has been wet-processed and dissolved in the electrolyte. In the process of accumulation, refined nickel will eventually be obtained.” Sun Weidong introduced that from the perspective of production, after the new production capacity is put into operation, the contribution to the marginal growth of domestic refined nickel production in 2023 may reach 18,000 metal tons, and after the process is mature, capacity expansion will also become possible.
“Considering that Tsingshan and Huayou still have other refined nickel production capacity under construction, the bottleneck of the conversion of secondary nickel to primary nickel will most likely be broken this year, and the extremely high premium of primary nickel to secondary nickel will also likely be eliminated. Shrinkage.” Sun Weidong told reporters that from the news point of view, the news of Qingshan’s new production capacity will ease the market’s concerns about the structural shortage of refined nickel in the first half of the year, which will be negative for nickel prices. At present, the newly put into production of refined nickel has not yet registered as a delivery brand, but the impact path may be to replace the delivery products from downstream demand to ease the delivery pressure. In the future, the explicit inventory of the exchange will gradually increase, and the LME liquidity crisis is expected It will also be gradually alleviated. From the perspective of trading, continue to pay attention to changes in liquidity, and in the case of low positions, mid-term short orders can be placed in stages.
Lack of support, the downward trend of copper prices is expected to continue
Since the Federal Reserve announced the minutes of the “Most Eagle” meeting during Wednesday night trading, the U.S. dollar index has rebounded strongly, and Lun Copper has dived. It peaked and fell after 1 ton, and then maintained a narrow range of oscillations in the range of 64,000-64,300 yuan/ton. “From the perspective of the reasons for the decline, on the one hand, this is a continuation of the downward trend that started on December 28, 2022. On the other hand, it is also the result of the US dollar ushering in a phased bottom and showing signs of rebound.” CSI Futures Industrial Products Chief Analyst Jiang Lu introduced to reporters.
In his view, the downward trend after December 28 last year was essentially a reflection of weakening fundamentals. The most intuitive evidence is that domestic spot premiums fell sharply at almost the same time. In fact, the accumulation trend of copper inventories and the decline in imported copper premiums have already indicated the weakening of fundamentals, but the historically low inventory levels have shown strong support for prices. Entering the first quarter of the new year, copper will enter the traditional accumulation cycle, supply and demand will become loose, and the support of prices will also weaken under the expectation of weakening reality.
“In addition, at the turn of the new year, more voices are bearish on the global economy in 2023. The market has shifted from optimism in the fourth quarter of 2022 to concerns about an economic recession in 2023. Risk appetite has decreased, which has contributed to the formation of a downward trend. Jiang Lu added that from a market perspective, copper prices will rise sharply from November 3, 2022 due to the sharp drop in the U.S. dollar index. Slowing down, and even showing signs of rebound, the hawkish minutes of the Federal Reserve showed that higher interest rates will be maintained for a longer period of time, coupled with the sluggish global economy, this makes the performance of the US dollar index in 2023 may be stronger than previously expected, and the strength of metal prices may rise weakened.
From the perspective of technical analysis, Jiang Lu believes that 64,000 yuan/ton is the low point for the operation of the main copper contract in Shanghai after November, and it is also the high point of the oscillation range from August to October in 2022, which is a relatively critical price point. There is a certain supporting effect in the short term, and there is a high probability that copper prices will repeat around 64,000 yuan/ton.
“On the whole, the current concerns about macroeconomic recession are heating up, supply and demand are in a loose state, and the downward trend of copper prices is expected to continue. After a short adjustment at the current price level, it is expected to fall further, and may fall to 60,000 yuan/ton after the Spring Festival.” Jiang Lu said.
Weak demand, be wary of the drop in tin prices
Yesterday, tin prices fluctuated weakly. Liu Yinan, a tin metal researcher at Everbright Futures, told reporters that at present, tin stocks continue to accumulate, internal and external structures are weak, the spot basis is weakening, and the fundamentals are weak in reality. In the future, we need to be vigilant against the fall of high tin prices.
Regarding the previous weakening of basic metals, tin prices once strengthened, breaking through the pressure line of 200,000 yuan/ton, and once touching the integer mark of 210,000 yuan/ton. Liu Yinan believes that this may be due to the release of customs data in November 2022. China imported 5174 tons of refined tin in a single month, reaching the second highest level of imports in the year. However, in contrast, the domestic inventory production remained below 15,000 tons per month, and the accumulation rate was weak, and it was transferred to destocking again after the completion of the 2212 contract delivery. The market believes that the forecast of demand in the early stage was wrong, and the actual consumption may be stronger than the forecast, and they turned to correct the excessively pessimistic transactions in the early stage.
“However, we believe that last month’s destocking may be due to the large uncertainty of domestic transportation at that time, and downstream concerns about raw material transportation. On the other hand, it may be near the end of the year, and the reverse position of the smelter in the early stage is due to the monthly difference. There is a certain possibility of picking up the goods and transferring them to the standing inventory due to the convergence of the basis difference.” He reminded.
Looking forward to the market outlook, Liu Yinan said that the inventory has been transferred back to the accumulated warehouse last week, and the number of registered warehouse receipts has continued to increase this week, and the recovery of domestic demand has basically been falsified. “On the raw material side, in November 2022, domestic imports of tin ore will be 26,600 tons, an increase of 124% year-on-year. Imports at the ore side will return to growth, and the shortage of raw materials will be falsified. Imported tin ingots have increased significantly, but there has been no circulation, and we need to be alert to the risk of this part of the inventory becoming invisible again.” He mentioned that from the perspective of demand, domestic electronic demand is still sluggish, and there is no sign of improvement in the short term. Focus on just-needed purchases at low absolute prices. Lead-acid batteries have entered the seasonal off-season, and the operating rate of enterprises has weakened month-on-month. “Overall, at this stage, in the face of continuous accumulation of tin inventories, weak internal and external structures, and weak fundamentals, investors need to be wary of a drop in tin prices.” He mentioned.
Source: Futures Daily
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