SMM Evening Comments (Oct 13): Shanghai nonferrous metals closed mostly higher, tin fell 0.31%

SHANGHAI, Oct 13 (SMM) – SHFE nonferrous metals rose for the most part on Tuesday October 13 as data from China showed that the country's exports and imports of goods hit a record in yuan-denominated terms in September.

German Finance Minister Olaf Scholz said he is confident the economy can return to pre-crisis levels by 2022, but that European leaders needed to work together.

Aluminium, the best performer, rose 0.9%, nickel advanced 0.53%, copper went up 0.08% and lead gained 0.47%, while tin edged down 0.31% and zinc dropped 0.05%.

A total of 95 vessels carrying 14.67 million mt of iron ore arrived at major Chinese ports during October 4-10, SMM estimates. This was down 340,000 mt from the previous week, but was up 1.99 million mt from the same period last year. The amount of arrivals in Shandong and Tianjin both increased week on week, but those in Tangshan declined as local production restrictions led to port lockdowns.

The ferrous complex fell across the board. Iron ore decreased 1.57%, rebar slipped 0.25%, and hot-rolled coil lost 0.11%.

Copper: The most-traded SHFE 2011 copper contract finished the day 0.08% higher at 51,360 yuan/mt. Macro sentiment has not changed substantially, the US fiscal stimulus plan is still under negotiation, and the two parties have not reached a consensus on the new plan. It is very unlikely that the fiscal stimulus bill will be passed before the congressional election, and market investors are still paying close attention to its progress. Fundamentally, there is still strike risk on the supply side, supporting the copper price.

Aluminium: The most-liquid SHFE 2011 aluminium contract fell to an intraday low of 14,540 yuan/mt and closed up 0.9% at 14,620 yuan/mt. Open interest rose 6,313 lots to 122,000 lots. As delivery is approaching, spot premium continues to fall. Besides the flow of funds, macro factors such as the US dollar index will continue to affect the price changes of base metals.

Zinc: The most-active SHFE 2011 zinc contract slid to a session low of 19,215 yuan/mt, before finishing the day 0.05% lower at 19,245 yuan/mt. Open interest fell 3,685 lots to 85,989 lots. The continuous reduction of social inventories suppressed the spot market amid tepid downstream consumption. The contract is expected to trade sideways tonight.

Nickel: The most-traded SHFE 2012 nickel contract ended the day 0.53% higher at 117,100 yuan/mt today. Open interest fell 1,563 lots to 108,946 lots. China's NPI output rose 2.91% from August to 46,000 mt Ni in September, but was 12.74% lower than a year earlier. This included 38,600 mt Ni of high-grade NPI, up 3.67% on the month, and 7,400 mt Ni of low-grade NPI, up 0.83% month on month.

Lead: The most-traded SHFE 2011 lead contract slid to an intraday low of 14,750 yuan/mt, before regaining some ground to finish the day 0.47% higher at 14,825 yuan/mt. Open interest fell 256 lots to 23,758 lots. Primary lead refineries are willing to ship the goods due to the rising lead prices, while the downstream purchases carefully on demand, and the premium of recycled refined lead also expands. The upward trend of the contract is likely to be weak. The contract will test support from 14,900 yuan/mt tonight.

Tin: The most-liquid SHFE 2012 tin contract closed down 0.31% at 146,420 yuan/mt today. Open interest rose 130 lots to 27,468 lots. Pressure below is expected to around 145,000 yuan/mt. SMM data showed that China produced 14,342 mt of refined tin in September, up 0.93% from August.