SMM Evening Comments (Sep 22): Shanghai nonferrous metals declined for the most part, lead advanced 0.36%

SHANGHAI, Sep 22 (SMM) — SHFE nonferrous metals broadly fell on Tuesday September 22 as investors focused on new worries about the coronavirus and economy.

Shanghai nonferrous metals, except for lead and tin, traded lower on Tuesday September 22. Zinc dropped 1.93% to lead the losses, nickel weakened 1.86%, copper declined 0.94%, and aluminium fell 0.89%, while lead climbed 0.36%, and tin advanced 0.21%.

A total of 76 vessels carrying 12.2 million mt of iron ore arrived at major Chinese ports during September 13-19, SMM estimates. This was down 2.44 million mt from the previous week. The amount of arrivals at major Shandong ports fell sharply week on week, while that in Tangshan rose by more than 20%. 

The ferrous complex fell across the board. Hot-rolled coil fell 0.68%, rebar shed 0.45% and iron ore went down 2.03%.

Copper: The most-traded SHFE 2011 copper contract closed down 0.94% at 51,810 yuan/mt today. The pandemic situation in European countries continued to deteriorate, and investors were worried that the second wave of pandemic will come again, and the risk aversion will continue to push up, suppressing copper prices. In addition, Powell stressed that the prospects for the US economic recovery are still full of uncertainties, and the market is still worried about the speed of economic recovery. The rise of the US dollar also suppressed the rise of copper prices. The trend of the US dollar will come under scrutiny tonight. If the US dollar maintains a strong rebound, there will still be high pressure above the copper prices.

Aluminium: The most-liquid SHFE 2010 aluminium contract fell to an intraday low of 14,520 yuan/mt and finished the day 0.89% weaker at 14,525 yuan/mt today. Open interest fell 11,191 lots to 109,000 lots. Aluminum prices and premium both fell amid the sluggish spot market before the National Day holidays, and funds flowed out sharply. The open interests of 2010 contract and the flow of the fund will come under scrutiny.

Zinc: The most-active SHFE 2011 zinc contract fluctuated around 19,600 yuan/mt today and ended 1.93% weaker at 19,530 yuan/mt, Open interest rose 2,214 lots to 79,553 lots. The panic originated from Europe has not been lifted. On the fundamentals side, the weak spot trading may affect the restocking of the National Day holidays. Without further stimulation, it is unlikely for the contract to rise tonight.

Nickel: The most-traded SHFE 2011 nickel contract traded between 112900-113600 yuan/mt and finished the day 1.86% lower at 113,200 yuan/mt today. Open interest fell 5,865 lots to 101,000 lots. The move of the contract will be monitored tonight.

Lead: The most-traded SHFE 2010 lead contract surged to an intraday high of 15,150 yuan/mt, before giving some gains to end 0.36% higher at 15,920 yuan/mt today. Open interest rose 185 lots to 20,648 lots. The downstream consumption of fundamentals is sluggish with limited upward momentum of lead prices. The contract is expected to fluctuate vigorously in the near term due to stockpiling at low prices before the National Day holidays and the cost of secondary lead.

Tin: The most-liquid SHFE 2011 tin contract ended 0.21% higher at 143,900 yuan/mt today. Open interest fell 1,989 lots to 19,000 lots. Pressure below is expected to around 10-day moving average of 143,500 yuan/mt.