SMM Morning Comments (Aug 7): Shanghai base metals rose for the most part, lead surged nearly 2.5%

Published: Aug 7, 2020 10:12

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Nonferrous metals on the SHFE mostly increased on Friday morning, holding onto overnight gains, and lead surged nearly 2.5%.

SHANGHAI, Aug 7 (SMM) — Nonferrous metals on the SHFE mostly increased on Friday morning, holding onto overnight gains, and lead surged nearly 2.5% as of 10:00 Beijing time. Meanwhile, on the LME, base metals prices were mixed.

On the SHFE, nonferrous metals, except for aluminium, cruised higher in overnight trading. Copper added 0.21%, zinc advanced 0.44%, lead surged 1.98%, nickel rose 0.4% and tin edged up 0.03%.

Their counterparts on the LME increased for the most part on Thursday. Aluminium strengthened 0.99%, zinc jumped 1.07%, lead surged 1.93% and nickel increased 1.3%, while copper and tin were nearly flat.

Copper: Three-month LME copper held steady on Thursday and finished the day at $6,486/mt. It is likely to move between $6,460-6,510/mt today. It is likely to move between $6,460-6,510/mt today.

The most-active SHFE 2009 copper contract fluctuated rangebound in overnight trading, ending 0.65% weaker at 14,450 yuan/mt. Weaker demand and continued tensions between the US and China will keep investors cautious. The contract is expected to trade between 51,600-51,900 yuan/mt today, while spot premiums are seen at 40-100 yuan/mt.

Aluminium: Three-month LME aluminium ended 0.99% higher at $1,778/mt on Thursday.

The most-liquid SHFE 2009 aluminium contract extended earlier losses and closed 0.65% weaker at 14,450 yuan/mt in overnight trading. It is expected to move between 14,400-14,850 yuan/mt today, while spot premiums are seen at 40-60 yuan/mt over the September contract.

Zinc: Three-month LME zinc closed 1.07% higher at $2,404/mt in choppy trading on Thursday. Zinc stocks across LME warehouses dipped 150 mt or 0.08% to 187,425 mt. Weak dollar, upbeat jobless data and progress in talks of coronavirus relief package bolstered zinc prices. LME zinc is expected to trade between $2,360-2,410/mt today.

The most-traded SHFE 2009 zinc contract increased 0.44% to end at 19,400 yuan/mt in overnight trading, after hitting a new high of 19,570 yuan/mt earlier in the session. Ample liquidity and supportive monetary policies may further bolster zinc prices. The contract is expected to move between 19,200-19,700 yuan/mt today, while spot premiums for domestic 0# Shuangyan are seen at 80-90 yuan/mt over the September contract.

Nickel: The most-active SHFE 2010 nickel contract soared to a session high of 116,500 yuan/mt as fewer Americans sought jobless benefits in the week ended August 1, but later pared all gains and fell to a session low of 114,150 yuan/mt, before closed 0.4% higher at 115,290 yuan/mt in overnight trading.

Lead: Three-month LME lead ended 1.93% higher at $1,954/mt on Thursday, after hitting an intraday high of $1,972/mt earlier in the session.

The most-active SHFE 2009 lead contract closed 1.98% firmer at 16,460 yuan/mt in overnight trading. Rising gold and silver prices and the prospect of improving domestic demand buoyed lead prices.

Morning comments Copper Aluminium Nickel Zinc Lead Tin

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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