SMM Evening Comments (Sep 9): Shanghai nonferrous metals fell across the board

SHANGHAI, Sep 9 (SMM) – SHFE nonferrous metals fell across the board on Wednesday September 9.

Nickel led the losses and slumped 2.88%, copper slipped 1.31%, zinc eased 2.92%, lead lost 2.34%, tin went down 1.95% and aluminium decreased 0.97%.

Operating rates at enameled wire makers gained 1.24 percentage points from July and 6.59 percentage points from a year earlier to 76.63% in August, 1.37 percentage points higher than the expected 75.26%, according to an SMM survey of 34 producers with total capacity of 1.08 million mt.

The ferrous complex also traded lower. Hot-rolled coil fell 2.9%, rebar shed 2.22% and iron ore went down 3.4%.

Copper: The most-traded SHFE 2010 copper contract rose to an intraday high of 52,300 yuan/mt in the afternoon trading, and closed 1.31% lower at 51,830 yuan/mt today. Crude oil prices plummeted last night due the lower supply of crude oil and the severe European pandemic, which caused a new round of crude oil demand concerns. Saudi Arabia sharply lowered its discount to Asian customers, leading to the market concerns about supply and demand with high inventories. Whether the contract could move above 52,000 yuan/mt will come under scrutiny tonight.

Aluminium: The most-liquid SHFE 2010 aluminium contract finished the day 0.97% weaker at 14,355 yuan/mt in choppy trading. Open interest rose 767 lots to 122,000 lots.

Zinc: The most-active SHFE 2010 zinc contract fell to an intraday low of 19,205 yuan/mt before regaining some ground to end 2.92% weaker at 19,275 yuan/mt today. Open interest fell 1,127 lots to 92,949 lots. The contract is expected to remain above 40-day moving average tonight.

Nickel: The most-traded SHFE 2011 nickel contract closed down 2.88% at 115,850 yuan/mt today as crude oil prices plummeted last night. Open interest fell 11,439 lots to 128,863 lots. The US crude oil has shown an upward trend, but LME Nickel has not halted its decline.

Lead: The most-traded SHFE 2010 lead contract fell rapidly to a session low of 15,215 yuan/mt after opening, and finished the day 2.34% lower at 15,220 yuan/mt. Open interest rose 145 lots to 25,048 lots. Whether support from longs could keep the contract above 15,200 yuan/mt will be watched tonight.

Tin: The most-liquid SHFE 2011 tin contract closed 1.95% lower at 144,460 yuan/mt today. Open interest fell 1,329 lots to 21,712 lots.