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【SMM Daily Review】 Metal Prices Surge, Shanghai Tin Drops by 2.76%, Coking Coal Rises by Almost 4%
Source: SMM 2023-08-01 15:57
On August 1st, SMM Reports:
Crude Oil Market: Crude oil prices retreated today, with both WTI and Brent crude falling by 0.27% as of 15:11. International oil prices have been surging since June 28, with WTI and Brent crude experiencing maximum gains of 21% and 18%, respectively.
On the supply side, oil-producing countries, led by Russia and Saudi Arabia, are delivering on their production cut commitments. In August, Russia’s oil exports from western ports will decrease by 100,000 to 200,000 barrels per day, and ship scheduling data indicates that Saudi Aramco’s crude oil exports in July decreased by nearly 700,000 barrels per day compared to June. There are reports suggesting that Saudi Arabia may propose extending the current 1 million barrels per day production cut strategy until September during the early August OPEC+ Joint Ministerial Monitoring Committee meeting. Saudi Arabia’s average daily production in June was about 9.98 million barrels per day, and it might decrease to 9 million barrels per day in July, reaching the lowest level since July 2021.
Amid strong seasonal demand and hot weather, both refined oil and crude oil prices are spiraling upwards. In the first half of this year, domestic crude oil imports and processing reached historic highs, with China accounting for 52% of the global increase in crude oil demand. Considering the peak season for seasonal consumption, gasoline consumption is relatively stronger compared to other oil fractions. According to data from the U.S. Energy Information Administration (EIA) for the week ending on July 21, 2023, daily apparent consumption of refined oil reached 3.718 million barrels in the United States, while the average daily apparent consumption of gasoline in July was 3.452 million barrels. Taking cracking spreads and apparent consumption into account, the current demand for gasoline and refined oil in the United States shows resilience amid concerns about economic recession during the interest rate hike cycle.
Regarding inventory levels, the United States intends to repurchase at least 12 million barrels of SPR (Strategic Petroleum Reserve) in the second half of the year, which will aid in the smooth destocking of commercial crude oil. Recently, crude oil inventories at Cushing have significantly decreased to a low point for the year. This is partly attributed to the high operating rate of refineries in the Midwest and the possibility of increased extraction of crude oil at refineries in the Gulf of Mexico region after the SPR sell-off has concluded. These signs indicate a significant exacerbation of supply tightness in the U.S. market, providing robust support to oil prices.
Regarding the U.S. dollar, the U.S. dollar index has risen for two consecutive days, increasing by 0.24% as of 15:12 today. Survey data released by the Federal Reserve on Monday showed that U.S. bank credit standards tightened in the second quarter, and loan demand from businesses and consumers weakened. This indicates that the Fed’s interest rate actions are successfully slowing down financial growth in the U.S. Market expectations for this week’s non-farm payroll data from the U.S. are positive.
In July, Eurozone inflation further declined, potentially pushing the European Central Bank to refrain from raising interest rates at least in the next meeting. Eurozone inflation decreased further in July, and most indicators measuring core price growth also slowed down.
On the macroeconomic front, market sentiment has been boosted by expectations of domestic policies, with the manufacturing PMI in July better than expected, leading to a rebound in market risk appetite.
As of the daytime closing, the prices of domestic base metals were mixed. Shanghai nickel fell by 0.46%, Shanghai lead fell by 0.47%, and Shanghai tin dropped significantly by 2.76%. On the other hand, Shanghai aluminum rose by 1.14%, alumina increased by 1.56%, Shanghai copper surged by 1.64%, and Shanghai zinc climbed by 1.78%. Today, the price of tin in Shanghai experienced a sharp decline, leading downstream enterprises to release their purchasing sentiment. Many of them conducted just-in-time purchases in the morning to replenish their inventories. Most trading companies also reported a significant improvement in shipping conditions today, with only a few companies mentioning that there were still no transactions in the morning. The transaction situation showed some differentiation, and downstream enterprises preferred to purchase smaller-brand tin ingots with larger discounts and imported tin ingots, showing relatively low preference for the delivery brand tin ingots.
Lithium carbonate prices on the main exchange fell by 0.95%. In the black metal sector, only hot-rolled coils fell by 0.05%. Rebar rose by 0.34%, stainless steel by 0.46%, iron ore by 0.96%, coking coal by 3.06%, and coking coal surged by nearly 4%. Industrial silicon on the main exchange fell by 0.33%. Shanghai gold and silver rose by 0.23% and 0.97%, respectively. As of 15:17 today, COMEX gold and silver fell by 0.75% and 1.09%, respectively. LME metals saw a general decline, with only LME lead rising by 0.23%. LME nickel fell by 0.04%, LME zinc by 0.21%, LME copper by 0.50%, LME aluminum by 0.66%, and LME tin by 3.00%.
Post time: Aug-01-2023