SMM Morning Comments (Nov 27): Shanghai base metals were mostly higher as investors await data on China's industrial profits

Telah Terbit: Nov 27, 2020 09:36 (GMT+8)
Nonferrous metals on the SHFE were mostly higher on Wednesday morning, and their counterparts on the LME rose across the board, as investors await data on China's industrial profits for October.

SHANGHAI, Nov 27 (SMM) — Nonferrous metals on the SHFE were mostly higher on Wednesday morning, and their counterparts on the LME rose across the board, as investors await data on China's industrial profits for October.

As the race for a coronavirus vaccine continues, questions are being raised over AstraZeneca’s vaccine candidate, for which the firm said combined results revealed it to be 70% effective.

Markets had gotten a boost earlier this week after the interim analysis of clinical trials were released by AstraZeneca. That development had come on the back of a string of encouraging vaccine results after late-stage trial readouts from Pfizer-BioNTech and Moderna, raising hopes of a recovery from the pandemic that has crippled economies globally.

Shanghai base metals mostly advanced in overnight trading. Nickel rose 1.79% to lead the gains, aluminium advanced 0.79%, copper added 0.8% and tin edged up 0.55%, while zinc and lead underperformed with 0.05% and 0.2% losses respectively.

The LME complex rose across the board on Tuesday. Nickel was the best performer with a rise of 1.43%. Lead advanced 0.96%, tin edged up 0.56%, aluminium climbed 0.38%, zinc increased 0.14% and copper went up 1.17%.

Copper: Three-month LME copper rose 1.17% to end at $7,412/mt on Thursday, and is likely to trade between $7,360-7,440/mt today.

The most-active SHFE 2101 copper contract went up 0.16% to close at 55,400 yuan/mt in overnight trading, and it is expected to move between 55,100-55,600 yuan/mt today, while spot premiums will be seen at 110-180 yuan/mt.

During Thanksgiving holiday, the financial market was relatively calm. It is still necessary to be cautious about the uncertainty of economic recovery caused by the COVID-19 and pay attention to the risk of callback. On the spot side, the market continued to rise, and the downstream wait-and-see mood was strong, resulting in a stalemate in the transaction. It is unlikely to see a significant reduction in the premium.

Zinc: Three-month LME zinc rose 0.14% to close at $2,763/mt on Thursday. Zinc stocks at LME-listed warehouses fell 425 mt to 221,875 mt. Overnight, the good news of COVID-19 vaccine and the clear results of the US election led to the recovering market risk appetite. However, the employment data in the US is bleak, and the number of new coronavirus infections in the world is soaring, which makes people doubt the rapid economic recovery, and is expected to limit the upside space of LME zinc. The contract is likely to trade between $2,740-2,790/mt today.

The most-liquid SHFE 2101 zinc contract fell 0.05% to end at 20,860 yuan/mt in overnight trading. According to an SMM surcey, the overlay of environmental protection inspection in the north has weakened seasonally, the orders for galvanizing have decreased, the domestic orders for die-casting zinc alloys have also decreased slightly, and the consumption support is insufficient. However, TC continues to decline, and tight supply still supports zinc prices. It is expected that the contact will still fluctuate strongly in the near term. The SHFE zinc contract is expected to move between 20,700-21,200 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be seen higher at 130-140 yuan/mt.

Nickel: The most-active SHFE 2102 nickel contract rose 1.79% to close at 121,480 yuan/mt on Thursday. Open interests rose 15,000 lots to 170,000 lots.

Lead: Three-month LME lead settled 0.96% higher at $2,043/mt on Thursday. The positive results of vaccine trials in many medical institutions once again boosted the market, and the weakening of the US dollar supported the trend of basic metals.

The most-active SHFE 2101 lead contract trended lower on Thursday night, ending 0.2% lower at 15,260 yuan/mt. The contract is likely to continue to fluctuate.

Tin: Three-month LME tin closed up 0.56% at $18,840/mt on Thursday. The US dollar index rebounded slightly, and the market was more worried about the development of the current pandemic and German Chancellor Merkel's speech, and the safe haven function of the US dollar was strengthened. Pressure above will be seen from $18,500 /mt today. Support below will be seen from $19,000/mt today.

The most-liquid SHFE 2101 tin contract rose 0.28% at 146,820 yuan/mt on Thursday night. It mainly traded between five-day moving average and 20-day moving average. The contract is expected to fluctuate around the moving average in the near term. Pressure above will be seen from 147,500 yuan/mt today. Support below will be seen from 145,500 yuan/mt today.

Pernyataan Sumber Data: Kecuali informasi yang tersedia untuk publik, semua data lainnya diproses oleh SMM berdasarkan informasi publik, komunikasi pasar, dan mengandalkan model database internal SMM. Hanya untuk referensi dan tidak menjadi rekomendasi pengambilan keputusan.

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