SMM Morning Comments (Aug 14): Nonferrous metals broadly rose Friday morning on dollar slide and positive US jobless claims data

SHANGHAI, Aug 14 (SMM) — Nonferrous metals on both LME and SHFE cruised higher for the most part as of 10:01 Beijing time on Friday morning, as US unemployment data topped expectations and dollar weakened.    

Those metals finished Thursday’s session in negative territory as the stalemate in US coronavirus relief package talks persists.

On the SHFE, nonferrous metals, except for lead, moved lower in overnight trading. Copper fell 1.64%, aluminium shed 0.52%, zinc slipped 0.64%, nickel weakened 0.56% and tin slid 0.27, while lead added 0.88%.

Their counterparts on the LME performed similarly on Thursday. Copper sank 2.56%, aluminium fell 1.2%, zinc declined 1.15%, nickel slipped 1.44% and tin weakened 0.29%, while lead advanced 0.13%.

Copper: Three-month LME copper trended lower on Thursday, finishing the day 2.56% weaker at $6,270/mt. It is expected to move between $6,250-6,300 yuan/mt today.

The most-active SHFE 2009 copper contract closed 1.64% lower at 49,650 yuan/mt in overnight trading. It is likely to trade between 49,600-49,900 yuan/mt today, while spot premiums are seen slightly higher at 80-130 yuan/mt.

Slipped oil prices, the recovery of copper concentrate supply from South America and weakened domestic consumption weighed on copper prices yesterday, but prices are estimated to rally today given weaker US dollar index and rising precious metals prices.

Aluminium: Three-month LME aluminium also trended lower on Thursday, ending 1.2% weaker at $1,763.5/mt.  

The most-liquid SHFE 2009 aluminium contract gave up earlier gains and closed 0.52% lower at 14,285 yuan/mt in overnight trading. It is expected to move between 14,200-14,650 yuan/mt today, while spot premiums are seen slightly lower at 30-50 yuan/mt.

Zinc: Three-month LME zinc fell below the five-day moving average and ended 1.15% lower at $2,365/mt on Thursday. Zinc stocks across LME warehouses expanded 1,075 mt or 0.51% to 213,825 mt. A lack of progress in negotiations of US economic stimulus package and a slow recovery of US labour market boosted risk aversion sentiment, which weighed on zinc prices. LME zinc is likely to move between $2,360-2,410/mt today.  

The most-traded SHFE 2009 zinc contract settled 0.64% weaker at 19,275 yuan/mt on Thursday night, with support from the 10-day moving average. Weaker crude oil prices and uncertainties over US-China and China-India trade relations dampened market sentiment. The September contract is expected to move between 19,200-19,700 yuan/mt today, while spot premiums for domestic 0# Shuangyan are seen higher at 120-140 yuan/mt.

Nickel: The most-active SHFE 2010 nickel contract weakened 0.56% to close at 112,010 yuan/mt in overnight trading. Open interest declined 2,557 lots to 133,000 lots. The October contract is likely to enter a period of consolidation today.

Lead: Three-month LME lead came off a session high of $1,960.5/mt to finish the day 0.13% higher at $1,951.5/mt on Thursday.  

The most-active SHFE 2009 lead contract ended 0.88% firmer at 16,110 yuan/mt in overnight trading.  

Tin: Three-month LME tin settled 0.29% lower at $17,470/mt on Thursday. Support below will be seen at around the 40-day moving average of $14,350/mt today.

The most-liquid SHFE 2010 tin contract hit a session high of 142,540 yuan/mt before erasing some gains and closing 0.27% lower at 141,790 yuan/mt in overnight trading. It may fluctuate between 140,000-143,000 yuan/mt today.