SHANGHAI, Feb 14 (SMM) – SHFE nonferrous metals extended their increase for the most part on Friday morning, as investors showed more confidence in China’s efforts to stop the spread of the coronavirus.
LME base metals increased across the board last night. Copper advanced 0.49%, aluminium gained 1.15%, zinc added 0.84%, nickel increased 0.76%, tin rose 0.09%, and lead gained 1.65%. The SHFE night trading session has been suspended since last week until further notice.
Copper: Three-month LME copper outperformed its SHFE counterpart, as a coronavirus outbreak in China affected cargo delivery and slow the resumption of domestic demand. LME copper shrugged off pressure from $5,800/mt and hit an intraday high of $5,814.5/mt, ending up 0.49% on the day. The most-traded SHFE contract, still faces pressure from 46,000 yuan/mt on the morning of Friday. LME copper is expected to trade between $5,750-5,800/mt today with its SHFE counterpart at 45,800-46,100 yuan/mt. Spot offers are likely to flip to premiums of 10 yuan/mt before the delivery of the SHFE February contract.
Aluminium: Three-month LME aluminium advanced to a two-week high before it finished the trading day 1.15% higher at $1,755/mt. Falling inventories across LME-listed warehouses supported the prices. Today, LME aluminium is seen hovering at $1,720-1,760/mt, with the most-liquid SHFE contract at 13,600-13,800 yuan/mt.
Zinc: Higher inventories and pressure from the 15-day moving average capped the increase in three-month LME zinc, which retreated after climbed to an intraday high of $2,198/mt, and closing up 0.84% on the day at $2,172.5/mt. The buildup in LME zinc inventories continued to slow, as the stocks rose 100 mt, or 0.14%, to 72,500 mt. SMM expects potential output cut on rising stocks of sulphuric acid and feedstock shortage to limit any downside room in zinc prices. Three-month LME zinc is expected to trade between $2,140-2,190/mt today with the most-traded SHFE contract at 17,100-17,500 yuan/mt.
Nickel: Three-month LME nickel extended its rangebound trend overnight, as it rebounded after slipped to a session low of $13,050/mt, ending up 0.76% on the day at $13,255/mt. The K-indicator continued to move higher, to above the 20-day moving average. LME nickel is expected to test support from $13,300/mt today.
Lead: A broad rally in LME base metals lifted three-month LME lead to an intraday high of $1894.5/mt, before it trimmed some gains and ended up 1.65% on the day at $1,882/mt. LME lead has climbed for three consecutive days, and pressure above from $1,900/mt will be monitored today.
Tin: Three-month LME tin pared majority of the gains in early session as it came off after hit an intraday high of $16,630/mt. With support from the five-day moving average, it finished $15/mt higher on the day at $16,585/mt. LME tin inventories rose 435 mt to stand at 6,825 mt. Support is expected from $16,300/mt today.