(Original title: Thunder in the middle of the night! The UAE is going to withdraw from OPEC? The official announcement is a “slap in the face”, and the oil market is shocked! British regulators took action against the LME, and the non-ferrous sector fell sharply)
Late last night, the foreign media broke the shocking “big melon”, but was quickly “slapped in the face”.
Last night, according to the Wall Street Journal, sources said that Saudi Arabia and the United Arab Emirates are currently at odds in many areas, including competition for foreign investment and influence in the global oil market, and the two sides have also disagreed on the direction of the conflict in Yemen. The most bitter disagreement is over Yemen, where the UAE is seeking to build a military base and runway on an island in the Mandeb Strait at the southern end of the Red Sea, but the Saudis have rejected it, the people said. The source also said that the UAE has long pressed OPEC+ to allow it to produce more oil, but the Saudis have refused. Emirati officials said the decision to withdraw from OPEC is now being debated internally in the UAE, a decision that would destabilize OPEC and reduce its huge influence in the global oil market.
As soon as the news came out, international oil prices plunged rapidly after hearing the news, with Brent oil and WTI crude oil both falling by nearly 3%.
But in less than an hour, Reuters and other media released “face-slapping” news, saying that “a source with direct knowledge of the matter” and “UAE officials” both said that the relevant reports were “far from the facts.” plans to leave OPEC. That halved the daily losses in oil prices.
In the U.S. stock market, an unnamed UAE official said that at present, the UAE has no plan to withdraw from OPEC. The US and cloth oils wiped out all the losses in the day.
As of the close of trading this morning, U.S. oil rose 2.5%, while cloth oil rose nearly 2%.
In addition, U.S. stocks continued to rise in late trading, the Nasdaq rose to 2%, the S&P 500 rose 1.6%, and the Dow rose 1.14%. In the end, the Nasdaq closed up 1.97% to 11689.01 points, the first time since February 1 that it closed up nearly 2%. The S&P closed up 1.61% at 4045.64. The Dow closed up 1.17% at 33390.97 points.
UK financial watchdog takes regulatory action against LME
Britain’s financial watchdog has opened a “coercive” probe into the London Metal Exchange (LME) when it froze and canceled billions of dollars worth of nickel in response to a historic price surge, the Financial Times reported yesterday. trade.
The Financial Conduct Authority said on Friday it would take action to monitor the LME’s efforts to improve deficiencies in its conduct, controls and governance that were exposed when the exchange suspended the nickel market a year ago.
The FCA will investigate some of the conduct, systems and controls of the LME during the freeze on nickel trading in early 2022.
In a separate statement, the BoE said it planned to appoint an independent monitor to regularly report on the progress of LME Clear, the LME clearing house, to improve its governance and risk management. The action follows a review by the BoE of LME Clear and independent research by Oliver Wyman.
“It is a sensitive time for the first anniversary of the Lunni incident. Although the LME has taken various measures to try to restore its former glory, the LME is currently facing insufficient market liquidity and a large number of unfinished legal investigations.” Gu Fengda told reporters. It is understood that the LME has continued to face a number of lawsuits and investigations in the past year, including the LME and its clearing house being sued by a number of hedge funds in 2022 and claiming hundreds of millions of dollars in losses.
The LME said in a statement that it would communicate a plan by the end of the first quarter to implement the recommendations of its independent review and would resume nickel trading during the Asian session on March 20. The LME “will fully cooperate” with the FCA’s enforcement investigation.
“Although the LME is involved in multiple lawsuits and there is no more public information about the above-mentioned investigations, judging from the performance of the LME market, it is reasonable to believe that the series of measures taken by the LME are in line with its efforts to maintain market stability, protect its own trading platform and protect most investments. The purpose of those involved.” Gu Fengda said that especially after March 8, 2022, some emergency operations of the LME have effectively avoided the market collapse caused by the irrational price of nickel under extreme market conditions, and overall reduced the occurrence of systemic crises at that time. threat.
Gu Fengda believes that the FCA’s law enforcement investigation against the LME may bring certain uncertainties to the market, but it is believed that it will not bring much disturbance to the metal market. In the later stage, we still need to continue to pay attention to the progress of the law enforcement investigation. Market traders should also be warned by such incidents and pay attention to the necessity of risk management and contingency plans.
Big stock market news!The Shanghai and Shenzhen stock exchanges announced on the same day
On March 3, the Shanghai Stock Exchange and the Shenzhen Stock Exchange officially released the “Implementation Measures for the Shanghai-Hong Kong Stock Connect Business of the Shanghai Stock Exchange” and “Implementation Measures for the Shenzhen-Hong Kong Stock Connect Business of the Shenzhen Stock Exchange” (collectively referred to as the “Implementation Measures”). It will come into force on the 13th. On the same day, the Hong Kong Stock Exchange announced that starting from March 13, 2023, the scope of Stock Connect stocks will be further expanded, and the stocks of major foreign companies listed in Hong Kong that meet the relevant conditions will be included in the Stock Connect stocks.
After the implementation of the “Implementation Measures”, the Shanghai Stock Connect stock benchmark index will be expanded from the Shanghai Stock Exchange 180 Index and the Shanghai Stock Exchange 380 Index to the Shanghai Stock Exchange A-Share Index. The stocks that can be selected in an industry are no longer subject to restrictions such as quantity, and the number of constituent stocks has increased significantly. At the same time, the Hong Kong Stock Connect stocks under the Shanghai-Hong Kong Stock Connect will be added to the Hang Seng Composite Small Cap Index with an average month-end market capitalization of HK$5 billion and above.
After the implementation of the “Implementation Measures”, the Shenzhen Stock Connect stock benchmark index has been expanded from the Shenzhen Stock Exchange Component Index and the Shenzhen Small and Medium-sized Innovation Index to the Shenzhen Stock Exchange Composite Index. The constituent stocks of the benchmark index basically cover all Shenzhen stocks, and the number of constituent stocks is 1,000 before the expansion. A substantial increase. At the same time, to adapt to the relatively high proportion of stocks with small market capitalization in the Shenzhen Stock Exchange, the market capitalization threshold for stocks transferred to Shenzhen Stock Connect has been lowered from 6 billion yuan to 5 billion yuan.
From the list, there are a total of 1,193 Shanghai Stock Connect stocks that meet the inclusion conditions, with a total market value of 51.11 trillion yuan, and a market value coverage rate of 90.94%; the number of Shenzhen Stock Connect targets will increase from 436 to 1,336, and the market value coverage rate will increase to 86%; The Hong Kong Stock Connect bids will increase to 560, including 4 foreign companies. This is the first time that foreign companies have been included in the Hong Kong Stock Connect.
A strong dollar puts pressure on the non-ferrous metals sector
On Friday, the non-ferrous metal sector was under pressure as a whole, with Shanghai tin and Shanghai nickel leading the market in decline, and the decline of other metals was relatively limited. Gu Jing, a non-ferrous analyst at Yide Futures, told reporters that the recent inflation data and PMI data released by the United States have made the market’s expectations for the Fed’s March rate hike by 50 basis points continue to rise. At the same time, the core inflation in the euro zone also hit a record high, and the interest rate hike expectations in the external market continued to ferment, which put pressure on the non-ferrous metal sector.
Zhang Ruoyi, a non-ferrous metals researcher at GF Futures, said that the United States has successively released non-agricultural employment, CPI, PPI and other data. Relevant data show that the U.S. job market is strong and the economy remains resilient, which may further support inflation. The Fed will likely maintain the policy rate at a high level. % forecasts rose and lowered expectations for rate cuts this year. At the same time, the Federal Reserve recently released the minutes of its January discount rate meeting, showing that officials from the Minneapolis Fed, St. Strong again.
At the same time, the non-ferrous research team of China Securities Futures pointed out that the latest decline in the number of initial applicants in the United States last week indicated that the U.S. labor market continued to strengthen, which may prompt the Fed to continue raising interest rates. metal prices. At the same time, the European Central Bank’s February monetary policy minutes also stated that the policy interest rate needs to be further raised, continue to strengthen the European Central Bank’s interest rate hike expectations, and jointly exert pressure on non-ferrous sectors.
Zijin Tianfeng Futures metal analyst Zhou Xiaoou pointed out that the current space above the US dollar and interest rates has opened up, and the non-ferrous metals market has been under significant pressure, but overseas risks may still dominate the overall direction of prices in March. If the follow-up non-agricultural and inflation performances are still strong, the market may set the price towards raising the interest rate by 50BP in March and raising the terminal interest rate to 6%. However, the current market relies heavily on single data. degree of inversion. In addition, important domestic conferences will be held soon, which will give more confidence to the market.
The price of tin once fell to 197330 yuan / ton
This Friday, the main force of Shanghai tin futures opened lower and lowered, hitting a record low of 197330 yuan / ton since December 27, 2022. As of the day’s close, the decline narrowed to 3.51%, closing at 199500 yuan / ton.
In Zhang Ruoyi’s view, apart from the strong overseas dollar that continues to put pressure on the non-ferrous sector, as far as the fundamentals of the tin market itself are concerned, affected by the slow recovery of demand, the “weak reality” continues to drag down tin prices. Specifically, overseas demand continues to be weak, domestic export orders are less, and demand for electronic terminals is weak.
“We recently visited solder companies in Dongguan and Shenzhen and learned that due to the current weak terminal demand, there are also fewer upward solder orders, a year-on-year decrease of about 30%. Therefore, solder factories need to lower processing fees to win orders, and the market competition is fierce.”
He said that in the case of weak terminals, spot transactions are also greatly affected, and the spot premiums and discounts remain around the flat level, which is significantly lower than the previous spot high premiums. At the same time, tin prices have fluctuated greatly recently, and downstream companies generally purchase based on rigid demand. Mainly, the willingness to do inventory is low, resulting in the continuous increase of warehouse receipts and social inventory.
In terms of inventory, according to SMM research, as of the week of February 24, the total domestic social inventory of tin ingots was 10,126 tons. In terms of regions, the inventory in East China decreased significantly last week, while the inventory in South China increased significantly. They said that tin ingots are currently facing a situation of weak supply and demand, and we still need to pay attention to the current recovery of demand. The social library may remain stable and even enter the destocking cycle. In addition, the exchange inventory shows that on March 2, the warehouse receipts of the SHFE increased by 270 tons to 8549 tons; LME tin stocks decreased by 10 tons to 2930 tons.
From the perspective of the supply side, Zhang Ruoyi pointed out that the supply side has seen marginal contraction recently, and the processing fees of smelters have been lowered several times. The processing fees of 40% tin concentrate in Yunnan have dropped by 4,500 yuan from 19,000 yuan/ton in November 2022 / ton to 14,500 yuan / ton, the supply of tin mines is tight.
SMM pointed out that since February, the operating rates of smelters in Yunnan and Jiangxi provinces have rebounded to normal levels as expected. As of the week of February 24, the total operating rate of the above two provinces increased by about 1.73% compared with the previous week. They predict that with the sharp drop in tin prices, the willingness to purchase downstream will be released, and the operating rate of downstream processing enterprises will also rebound significantly. In February, domestic refined tin output is expected to increase significantly month-on-month, and the output is expected to be 14,035 tons. However, the shortage of raw materials and the low processing fee squeezed the profit of the refinery still existed, and the overall output was still at a low level.
In SMM’s view, tin mines are currently tight but have not yet affected production, inventories may remain stable, and demand is still weak. Affected by the sluggish demand in the short term, the follow-up tin price is not motivated enough, and it is necessary to pay attention to the changes in social inventories and the introduction of relevant favorable policies.
Looking at the market outlook, Zhou Xiaoou said that since downstream consumption has not picked up, tin ingot inventories are still high, and it is still difficult for tin prices to change in direction. However, the pressure on tin prices will easily lead to tight mines and lower processing fees. At the same time, domestic smelters still consider sharing costs and increasing stable production. For example, the power cut in Yunnan did not have a significant impact on supply, which intensified the accumulation of tin ingots.
From these aspects, she believes that the tin market is entering an endless loop. To break this cycle, there must be the support of consumption recovery, which is more dependent on the recovery of the general environment, and at the same time requires the terminal to be accompanied by substantial policy support. In addition, the time axis for domestic and foreign economic recovery to be transmitted to the industry has also moved backward.
“From a medium to long-term perspective, we are more optimistic about the consumption expectations in the later period.” Zhang Ruoyi said that from the perspective of the industry cycle, the semiconductor industry is currently bottoming out and is expected to usher in a cyclical industry recovery in the second half of the year. Home appliance consumption is also expected to pick up in real estate Afterwards, it was boosted, increasing the demand for tin consumption. Therefore, in the medium and long term, under the background of decreasing supply and increasing demand, tin prices are expected to usher in the next round of market in the second half of the year. But in the short term, he pointed out that before there is no significant improvement in demand and inventory is digested, tin prices will still fluctuate in a wide range.
Why is the price of nickel falling endlessly?
This Friday, Shanghai Nickel fell by 2.14% within a day, and the closing price continued to hit a four-month low. Gu Jing, an analyst at Yide Futures Nonferrous Metals, said that the recent continued weakening of domestic nickel prices is mainly due to two factors: one is the return of the international macro policy hawks. The expectation of interest rate hikes continues to ferment, causing the prices of most assets including non-ferrous metals to continue to be under pressure; the second is due to the weakening of the domestic nickel supply and demand fundamentals. , and the market expects that more Russian nickel will flow into China, which will also alleviate concerns about the shortage of domestic deliveries.
“2023 is the key time node for the transformation of the supply and demand pattern of pure nickel.” Gu Jing told reporters that recently, nickel sulfate and electrolytic nickel have been seriously inverted in the nickel industry chain, which has led some nickel smelting enterprises to use nickel sulfate to produce pure nickel. There are more optimistic expectations for the growth rate of pure nickel supply. At the same time, domestic nickel consumption started slowly after the Spring Festival. The demand for stainless steel and batteries has limited boost to nickel prices. The weak domestic supply and demand coupled with the opening of the refined nickel import window have made domestic nickel prices continue to weaken under multiple pressures.
However, she pointed out that although the current nickel price continues to weaken, it is necessary to guard against the risk of an oversold rebound in the short term, especially as the price of electrolytic nickel falls, the inversion of the price of nickel sulfate and electrolytic nickel has been significantly restored, and some pure nickel with a wait-and-see attitude Production capacity may be suspended, making short-term nickel prices likely to recover at a low level. However, in the medium and long term, her bearish logic of weakening the supply and demand pattern of the pure nickel market remains unchanged.
Generally speaking, from the perspective of the non-ferrous sector, from the perspective of early March, Gu Fengda, head of the non-ferrous and new material research team of Guosen Futures, said that the trend of non-ferrous metals in the first two months of this year fluctuated sharply. The “spring turmoil” staged in advance of domestic and foreign asset prices has cooled down significantly. The market’s pre-speculation of many positive themes in advance has been falsified one after another. In March, non-ferrous metals and other industries are in the observation period before and after the intensive introduction of major policies. It takes time for market macro and major industry policies to go from decision-making to implementation, and high volatility in asset prices such as stocks, bonds, exchanges, and commodities seems to have become the new normal.
Looking forward to the market outlook, he expects that non-ferrous metals such as nickel will maintain a high probability of oscillating downward in March. At present, after Shanghai nickel futures fall below the integer mark of 200,000 yuan/ton, the lower test of 185,000-19,000 yuan/ton may be temporarily supported. He pointed out that the current bulls of non-ferrous metals such as nickel are mainly supported by China’s economic recovery and supply-side uncertainty disturbances, while the negative pressure mainly comes from the continuous tightening of overseas macro liquidity and the weakening pressure of supply and demand under domestic consumption that is not as expected.
“We believe that it is difficult to make a directional breakthrough in the market outlook. It is recommended to focus on short-term operations. Industrial customers strengthen hedging to lock in the risk of market fluctuations in early March, and actively respond to the threat of potential price fluctuations in the market.” Gu Fengda said.