According to the June 16 news of the State Food and Material Reserve Bureau, according to the China State Council executive meeting's plan for ensuring commodity supply and stabilizing prices, the State Grain and materials reserve bureau will put copper, aluminum, zinc and other state reserves in batches in the near future. The state Non-ferrous metal is specifically responsible for the relevant work, which is aimed at processing and manufacturing enterprises and is subject to open bidding.

With the official announcement of the dumping of copper, aluminum and zinc, yesterday afternoon, the Non-ferrous metal collective resumed diving market, the decline rapidly expanded. By the end of the day, Shanghai aluminum main contract closed at 18,590 Yuan/ton, down 1.82 percent. The Shanghai copper main contract closed at 68,450 yuan per ton, down 2.66 percent. The Shanghai Zinc main contract "turned green" at 22,310 yuan per ton, down 0.84 percent. The Shanghai nickel main contract closed at 128260 yuan per ton, down 3.78 percent.

1. Sell store information landed, short-term or on the impact of colored prices

In the face of the collective "face-off" of the Non-ferrous metal, market participants believe that macro sentiment at home and abroad has been further reduced due to expectations of a tightening of the Federal Reserve's monetary policy margin, domestic policy to sell stocks at the reserve level, and domestic rumours of strict scrutiny of overseas futures positions, the colored plate whole falls back, the center of gravity moves downward also is in the reason. On the Macro Front, markets are now focused on the Fed's interest rate meeting, where US inflation last week was higher than expected and earlier, the biggest rise in nearly 13 years. In the view of the industry, there is uncertainty in the short-term macro environment, need to wait for a clear guidance of the Federal Reserve Rate Decision. "The dollar index has clearly recovered in the past half-month and is now above the 90-day line, which is bad for the Non-ferrous metal, " said Non-ferrous metal, non-ferrous metal fell across the board yesterday afternoon. Fan Runze, a senior researcher at the Non-ferrous metal, said that the State Reserve and storage will no doubt make it difficult for copper to go to the warehouse in the peak season, further depressing copper prices. On the fundamentals of aluminum, aluminum ingot social inventory is still going, to provide support below the price. Social stocks of electrolytic aluminium in the country's main markets fell 21,000 tonnes to 887,000 tonnes as of Tuesday compared with last Thursday, according to data published by my website.

"for aluminium, consumption has maintained a high growth rate so far this year, but the supply side has experienced a large expected shortfall in the context of dual energy consumption control and power rationing, which has reduced the operational capacity of Aluminium electrolysis to less than 39m tonnes and delayed subsequent new production, " he said, assuming the dumping of 100,000 tons per month to the terminal, short-term gap remains, aluminum prices are expected to maintain high operation. "How much impact the dumping will have on the balance of supply and demand in the zinc market will have to wait for the release of the dumping rules, " Fan told reporters, adding that the loss of zinc ingots due to power rationing is in the range of 25,300 tonnes, the potential thrown reserves will basically wipe out the negative impact of the loss of supply in the upstream zinc market, the impact of today's announcement on the market is still partial to the short-term."Hongye futures analyst Zhang Tian said that the current focus of the market is still on inflation expectations, and that the Fed's monetary policy decisions will be decisive, with a general rebound likely if the Fed does not raise interest rates.".

2. Shanghai nickel falls back from high

Shanghai nickel fell sharply this week, and at one point fell more than 4 per cent yesterday. In this regard, the industry believes that in the background of Non-ferrous metal, copper, aluminum and other basic metals prices fell sharply, Nickel Bulls lack of confidence, sharply reduced positions led to a rapid decline in prices. Van Renze said that nickel sulfate and ferronickel rose less than expected after nickel prices continued to rise, and the underlying drivers were not strong. The market expects global nickel oversupply in the future, in the medium and long term, due to the release of a large number of new capacity in Indonesia, a large increase in nickel supply, the fourth quarter will begin to appear in surplus. "Nickel has always been the pricing center of Electrolytic Nickel, and the rise of nickel in the outer disk will inevitably lead to the rise of nickel in the inner disk. However, due to different fundamentals and the impact of the exchange rate, there will be some differences in the range between the two markets. For example, recently affected by the appreciation of the RMB, nickel in the outer disk has been stronger than domestic, which has also led to a strong and weak nickel in the outer disk, and the import window has been closed, " said Zhan Dapeng, director of all non-ferrous metals at Everbright Futures Research Institute. In the view of Zhan Dapeng, despite the macro and policy pressure, but can not deny that the current strong nickel fundamentals, and to a certain extent there is a mismatch between supply and demand. On the supply side, the period of rapid increase in Indonesian output during the year is over, and from a month-on-month comparison, there are signs of a decline in total supply due to a rapid decline in domestic output; on the downstream side, both the traditional stainless steel output and the marginal nickel sulfate output have the possibility of exceeding expectations, and there is no obvious sign of weakening under the high output, which basically dispels the market's doubts about the consumption overdraft over time. In addition, according to the balance of supply and demand, unless the supply of primary nickel and scrap stainless steel exceeds expectations and the production of stainless steel weakens substantially, the shortage of nickel will continue, which means that nickel destocking will also continue. "As the mismatch between supply and demand or inventory liquidation continues, nickel replenishment is expected to increase, " said Zhan Dapeng, still relatively bullish on the future performance of nickel.

Similarly, Fan runze also believes that the current stainless steel and new energy for nickel demand is very strong, supply contradictions have become prominent, thus driving the global market to go. "domestic refined nickel stocks are still at historic lows, LME nickel stocks continued to be removed, low inventory increase nickel price elasticity. Due to the recent 300 series stainless steel plant profit situation is good, union gold data show June 300 series stainless steel output estimated 1.54 million tons, is still high. There is a strong demand for ferronickel in high-discharge stainless steel production, and high-ferronickel factories have a strong mentality of being cheap,"Fan said, superposed high matte nickel exists uncertainty, nickel bean current demand is good, short-term prices still have some support, the reality of nickel supply and demand performance is good. Can the high demand and high export of stainless steel be sustained? According to Van Runze, the supply of nickel in Indonesia will increase in the future, and the demand for nickel beans in the new energy industry will probably decrease after the production of high-grade Matte and wet-process intermediates in Indonesia, follow-up needs to pay attention to Indonesia's new nickel project production progress and rhythm.

 Source: Futures Daily

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