SHANGHAI, Jan 26 (SMM) — Shanghai base metals were mostly higher on Tuesday morning as major indexes on Wall Street touched record highs overnight. Meanwhile, their counterparts on the LME also rose for the most part.
Shanghai base metals mostly advanced in overnight trading. Copper added 0.22%, tin rose 1.8%, lead went up 0.75% and nickel strengthened 0.23%, while aluminium slid 0.17% and zinc fell 0.27%.
The LME complex performed similarly on Tuesday. Copper added 0.22%, aluminium rose 1.28%, lead increased 1%, tin went up 2.28% and nickel strengthened 0.49%, while zinc fell 0.3%.
Copper: Three-month LME copper rose 0.24% to end at $8,005.5/mt on Monday, and is likely to trade between $7,960-8,040/mt today.
The most-active SHFE 2103 copper contract went down 0.22% to close at 58,960 yuan/mt in overnight trading, and it is expected to move between 58,600-59,100 yuan/mt today, while spot premiums will be seen at 80-130 yuan/mt.
Optimistic expectations of successful vaccine injection have cooled down. WHO says that in the foreseeable future, vaccine coverage will not reach the level that can prevent the spread of the virus. The pessimistic news of vaccine with the new measures of pandemic prevention and blockade kept investors cautious. In addition, Senate Majority Leader Schumer said that he would strive to launch a round of bail-out plan by mid-March at the latest, and the $1.9 trillion stimulus bill faced the risk of delaying. Under the cautious mood, the US dollar index rebounded. On the spot side, the contract continued to fluctuate at a high level, which inhibited the downstream restocking amid tepid market trade.
Aluminium: Three-month LME aluminium rose 1.28% to close at $2,020/mt on Monday, with open interest rising to 740,000 lots. Schumer, the leader of the Senate Majority Party, said that he would strive to launch a round of programs by mid-March at the latest, and the $1.9 trillion stimulus bill faced the risk of delaying. Under the cautious mood, the US dollar index rebounded. It is expected to trade between $1,990-2,050/mt today.
The most-liquid SHFE 2013 aluminium contract fell 0.17% to settle at 14,935 yuan/mt on Monday night, and is likely to trade between 14,090-15,060 yuan/mt today. Recently, the overall consumption of aluminium downstream in China weakened, aluminium ingot stocks posted slower decline, and social inventories of domestic aluminum ingots accumulated. In the later period, with the smooth logistics in northwest China, social inventories of aluminium ingots will further increase. In addition, near the Spring Festival, the downstream operating rates of aluminium processing fell, which suppressed aluminium consumption. Spot premiums for the contract will be seen higher at 60-120 yuan/mt.
Zinc: Three-month LME zinc fell 0.3% to close at $2,700.5/mt on Monday. Zinc stocks at LME-listed warehouses fell 1,675 mt to 189,775 mt. Because of the pressure on LME zinc caused by the strengthening of the US dollar, the postponement of the second dose of vaccine in the US worried the market. However, the new pandemic relief bill in the US with the good news that Britain plans to deregulate is expected to limit its decline. The contract is likely to trade between $2,690-2,740/mt today.
The most-liquid SHFE 2103 zinc contract fell 0.27% to end at 20,255 yuan/mt in overnight trading. TCs at home and abroad continued to fall, smelters' profits were meager, and the output may be compressed in the later period, while downstream zinc consumption enterprises were on holiday one after another, and their consumption weakened. Whether zinc stocks will begin to pile up will be monitored in the near term. It is expected that zinc prices will keep fluctuating in the near term. The SHFE zinc contract is expected to move between 20,000-20,500 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be seen higher at 180-190 yuan/mt.
Nickel: The most-active SHFE 2103 nickel contract rose 0.23% to close at 135,150 yuan/mt on Monday. Open interests fell 12,000 lots to 168,000 lots. The contact will continue to test support from 135,000 yuan/mt today.
Lead: Three-month LME lead settled 1% higher at $2,066.5/mt on Monday. Recently, the continuous sharp decline in LME lead stocks gave LME Lead support to fluctuate at high.
The most-active SHFE 2103 lead contract went up 0.75% to close at 15,510 yuan/mt on Monday night. Domestic positive macroeconomics and decreased social inventories boosted bulls' confidence and supported the high-level operation of SHFE Lead, but the market still needs to be alert to the end of the downstream restocking amid tepid spot market, which will bring pressure to SHFE Lead's upward movement.
Tin: Three-month LME tin closed up 2.28% at $22,470/mt on Monday. The US dollar index continued to rise, as the new US pandemic relief plan faced the risk of delay, and the sharp fluctuations in global stock markets weakened investors' interest in higher-risk currencies. The shortage of supply in overseas refined tin market supports the robust operation of LME tin. Pressure above will be seen from $23,000 /mt today. Support below will be seen from $21,500/mt today.
The most-liquid SHFE 2103 tin contract rose 0.25% at 170,180 yuan/mt on Monday night. The reduction of domestic circulation spot and the release of pre-holiday restocking demand have certain support for SHFE tin. The contract is expected to trade around 170,000 yuan/mt today.
