Most Shanghai Base Metals Finish with Gains (Dec. 21-25, 2015)

SHANGHAI, Dec. 25 (SMM) – Crude oil prices rose near 7% this week. The US dollar index fell nearly 1% below 98, driving up base metals. Market sentiment also improved after policy supports from China’s Central Economic Working Conference. The SMMI rose 2.54%, with tin leading increases. Trading volumes on SHFE tin surged. SHFE tin prices rising by daily limit, reaching as high as RMB 100,000/mt. Chinese tin smelters were holding back goods early in the week, but sold later the week due to rising price volatility. The SMMI.Sn increased 4.3%. 

SHFE zinc prices broke through RMB 13,000/mt, with a growing number of buyers. Zinc smelters moved goods proactively, and traders also operated actively to meet their annual sales target. Downstream buyers purchased modestly. The SMMI.Zn was up 3.97%.

Trading aluminum inventories fell for six weeks in a row to 720,000 mt, attracting an increasing number of longs to enter the market. In this scenario, spot aluminum turned from RMB 100/mt below to RMB 30/mt above SHFE 1602 aluminum. Downstream buyers built stocks aggressively on rising aluminum prices. The SMMI.Al climbed 3.23%. SHFE copper prices were firm, and spot quotes were mixed on sufficient imported copper. Most cargo holders lowered selling prices to generate cash, muting trading. The SMMI.Cu increased 2.45%. SHFE lead rebounded, and limited supplies also supported spot lead. The SMMI.Pb added 1.16%. 

Nickel prices remained weak, though. There were growing inflows of imported nickel due to high Shanghai/LME nickel price ratio. Jinchuan Group held its quotes firm, with buyers preferring Jinchuan Nickel over Russian nickel. Stainless steel mills were unwilling to hoard stocks. The SMMI.Ni dropped 0.92%. Trading will mute next week due to year-end factor.