SMM Morning Comments (Feb 1) Shanghai base metals set for a mixed start as China's manufacturing activity growth slowed in January

Telah Terbit: Feb 01, 2021 10:08 (GMT+8)
Shanghai base metals set for a mixed start on Monday morning as official data released over the weekend showed manufacturing activity in China growing at a slower pace in January, while their counterparts on the LME rose across the board.

SHANGHAI, Feb 2 (SMM) — Shanghai base metals set for a mixed start on Monday morning as official data released over the weekend showed manufacturing activity in China growing at a slower pace in January, while their counterparts on the LME rose across the board. 

Shanghai base metals mostly closed lower on last Friday January 29. Copper shed 0.31%, lead fell 1.37%, nickel weakened 0.26% and tin sank 3.34%, while aluminium rose 1.54% and zinc gained 0.43%. 

The LME complex all closed lower last Friday. Copper declined 1.14%, aluminium weakened 0.23%, zinc slid 0.7%, lead shed 0.17%, nickel slipped 0.84% and tin plunged 2.25%. 

Copper: Three-month LME copper fell 1.14% to close at $7,813.5/mt last Friday, while the most-traded SHFE 2103 copper contract ended 0.31% lower at 57,770 yuan/mt last Friday night.

The Biden administration’s call for a $1.9 trillion stimulus package was frustrated. Republicans proposed a $600 billion alternative, while the Democrats will independently initiate economic stimulus legislation. China’s official manufacturing Purchasing Managers’ Index came in at 51.3 in January, down 0.6 point from December, according to a statement by the country’s National Bureau of Statistics on Sunday. 

LME copper is expected to trade between $7,780-7,860/mt today, and SHFE copper between 57,600-58,100 yuan/mt, while spot copper will be traded at premiums of 60- 150 yuan/mt.

Aluminium: Three-month LME aluminium ended 0.23% lower at $1,977/mt last Friday, with open interest increasing 1,937 lots to 741,000 lots, and is likely to trade between $1,990-2,050/mt today.

The most-active SHFE 2103 aluminium contract ended 1.54% higher at 15,160 yuan/mt last Friday night, with open interest increasing 7,237 lots to 172,000 lots, and is expected to move between 14,800-15,200 yuan/mt today, while spot premiums will be seen at 10-60 yuan/mt.

Zinc: Three-month LME zinc climbed to an intraday high of $2,628.5/mt before relinquishing some gains to settle 0.7% lower at $2,571/mt last Friday, with open interest rising 2,082 lots to 233,000 lots. Zinc stocks across LME-listed warehouses dropped by 950 mt or 0.32% to 292,850 mt. High US dollar index, concerns over continuing spread of COVID-19 around the world and a slow rollout of vaccines drove up bearish sentiment in the market. LME zinc is likely to fluctuate between $2,570-2,620/mt today.

The most-liquid SHFE 2103 zinc contract rose rapidly to touch a session high of 19,865 yuan/mt after the bell of overnight trading, before giving up some gains to end 0.43% higher at 19,640 yuan/mt last Friday night, with open interest decreasing 4,536 lots to 98,399 lots. Restocking demand from downstream users improved amid low zinc prices, and zinc social inventories extended declines. Treatment charges for zinc concentrate declined further in Sichuan and Yunnan, suggesting a still tight concentrate supply. The March contract is likely to move between 19300-19800 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be seen higher at 180-190 yuan/mt against the February contract.

Nickel: The most-active SHFE 2104 nickel contract shed 0.26% to close at 131,430 yuan/mt last Friday night. In terms of fundamentals, downstream consumption of stainless steel was better than expected, supporting demand for nickel. As stainless steel prices increased, high-grade NPI prices also improved. In addition, consumption of nickel sulphate was strong as companies in the new energy sector brought forward their procurements.

Lead: Three-month LME lead bounced off a more than one-week low of $2,005/mt to an intraday high of $2,052.5/mt before erasing some gains to settle 0.17% weaker at $2,024/mt last Friday.   LME lead stocks shrank 5,400 mt to 98,705 mt. 

The most-liquid SHFE 2103 lead contract fell 1.37% to end at 15,085 yuan/mt last Friday night.  Lead prices are likely to remain weak this week as downstream users have basically completed pre-holiday restocking.

Tin: Three-month LME tin plunged 2.25% to close at $22,550/mt last Friday, after hitting a new high in 2021 at $23,175/mt earlier in the session. LME tin stocks steadied at 880 mt last Friday. LME tin is likely to move between $22,000-24,000/mt today. 

The most-traded SHFE 2103 tin contract tumbled 3.34% to settle at 167,170 yuan/mt, with open interest losing 4,845 lots to 21,001 lots. It is likely to fluctuate between 166,000-175,000 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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SMM Morning Comments (Feb 1) Shanghai base metals set for a mixed start as China's manufacturing activity growth slowed in January - Shanghai Metals Market (SMM)