SMM Morning Comments (Jan 29): Shanghai base metals rose broadly on Friday morning on better-than-expected US jobless data

SHANGHAI, Jan 29 (SMM) — Nonferrous metals on the SHFE were mostly higher on Friday morning, holding onto overnight gains, as the US first-time filings for unemployment benefits declined in the week ended January 23.  

Shanghai base metals all closed higher in overnight trading. Copper added 0.26%, aluminium advanced 0.68%, zinc gained 0.41%, lead firmed 0.52%, nickel strengthened 0.55% and tin rose 0.89%.

The LME complex, except for aluminium and lead, also cruised higher. Copper increased 0.78%, zinc rose 0.68%, nickel inched up 0.06% and tin firmed 1.18%, while aluminium dipped 0.3% and lead edged down 0.02%.

Copper: Three-month LME copper climbed to a session high of $7,928/mt before paring some gains to end at $7,904/mt on Thursday.

The most-traded SHFE 2103 copper contract surged to a session high of 58,460 yuan/mt before giving up some gains to close 0.26% higher at 58,150 yuan/mt in overnight trading.

The number of people who applied for US jobless benefits in late January fell to the lowest level in three weeks, but layoffs were still high early in the new year as the economy wrestled with a winter surge in the coronavirus pandemic. Initial jobless claims filed traditionally through the states fell by 67,000 to a seasonally adjusted 847,000 in the seven days ended Jan. 23, the government said on Thursday. US three major stock indexes all closed higher, and the US dollar index at one point fell to around 90.4, which boosted copper futures.

LME copper is expected to trade between $7,860-7,940/mt today, and SHFE copper between 57,900-58,400 yuan/mt, while spot copper will be traded at premiums of 10- 90 yuan/mt.

Aluminium: Three-month LME aluminium dipped 0.3% to settle at $1,981.5/mt on Thursday. The most-active SHFE 2103 aluminium contract added 0.68% to close at 14,910 yuan/mt in overnight trading, with open interest decreasing 1,862 lots to 162,779 lots.

Social inventories of primary aluminium ingots across eight consumption areas in China, including SHFE warrants, increased 13,000 mt from last Thursday to 682,000 mt as of January 28.

LME aluminium is likely to trade between $1,980-2,000/mt today, and SHFE aluminium between 14,600-14,950 yuan/mt, while spot premiums will be seen at 10-60 yuan/mt.

Zinc: Three-month LME zinc rose 0.68% to close at $2,589/mt on Thursday after hitting a new low in 2021 at $2,552/mt earlier in the session, with open interest losing 616 lots to 231,000 lots. Zinc stocks across LME-listed warehouses dropped by 700 mt or 0.42% to 293,800 mt. A weaker US dollar, rising US major stock indexes and lower-than-expected claims for jobless benefits boosted risk appetite in the market. LME zinc is expected to fluctuate between $2,560-2,610/mt today.

The most-traded SHFE 2103 zinc contract ended 0.41% higher at 19,590 yuan/mt in overnight trading. It is likely to move between 19,300-19,800 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be seen at 180-190 yuan/mt against the February contract.

Nickel: The most-traded SHFE 2104 nickel contract settled 0.55% higher at 132,400 yuan/mt in overnight trading, with open interest increasing 11,000 lots to 128,000 lots. Whether the contract could steady above 133,000 yuan/mt today will be monitored.

Lead: Three-month LME lead bounced off a more than one-week low of $2,007.5/mt to an intraday high of $2,047/mt before relinquishing some gains to end 0.02% lower at $2,027.5/mt on Thursday. LME lead stocks extended declines, shrinking by 3,025 mt to 10,415 mt.

The most-liquid SHFE 2103 lead contract gained 0.52% to settle at 15,445 yuan/mt in overnight trading. 

Tin: Three-month LME tin increased 1.18% to settle at $23,070/mt on Thursday, and is expected to move between $22,000-24,000/mt today as concerns on tin supply are likely to support tin prices in the short term.

The most-liquid SHFE 2103 tin contract closed 0.89% higher at 173,120 yuan/mt in overnight trading, with open interest rising 1,895 lots to 31,061 lots. It is likely to fluctuate between 170,000-175,000 yuan/mt today.