SHANGHAI, Feb 17 (SMM) – SHFE nonferrous metals opened the Monday trading session mostly lower, as concerns about the coronavirus (COVID-19) impact resurfaced after the number of reported new cases in China's Hubei province rose on Monday after two days of falls.
LME base metals fell across the board last Friday, with aluminium leading the losses and losing 1.9%. Nickle slipped 1.6%, zinc fell 1.1%, copper dropped 0.6%, lead eased 0.4%, and tin shed 0.2%. The SHFE night trading session remained suspended to contain the spread of the virus.
Copper: Three-month LME copper declined last Friday as concerns about the extent of COVID-19 in China and worriers about the strength of the US economic growth amid disappointing data on consumer expenditure lifted the US dollar and the safe-haven asset gold. LME copper fell 0.6% and closed at $5,756/mt. On the fundamentals, most copper processing companies in China had resumed production, but the operating rates were at low levels. Subdued downstream demand resulted in further increase in copper inventories in bonded area last week. With support from the five-day moving average, the most-traded SHFE contract is expected to trade between 45,800-46,100 yuan/mt today, with LME copper at $5,750-5,800/mt. Spot premiums are likely at 20-50 yuan/mt today.
Aluminium: Three-month LME aluminium relinquished increase from the prior session as a stronger US dollar sent it down 1.19% to end at $1,720/mt. The decline was capped on the back of falling inventories of aluminium stocks. Today, LME aluminium is seen trading between $1,720-1,760/mt, with the most-active SHFE contract at 13,600-13,800 yuan/mt.
Zinc: Three-month LME zinc fell on loaded-up shorts, slipping to a low of $2,143/mt and ending down 1.08% at $2,149/mt. LME zinc inventories continued to increase 3.21%, to stand at 74,825 mt last Friday. This, coupled with uncertainties around the COVID-19 development, which kept most downstream processors suspended until the second half of February, depressed zinc prices. But output cut of some smelters amid inventory pressure of sulphuric acid and feedstock shortage will limit the downside room in prices. LME zinc is expected to trade between $2140-2180/mt, with the most-traded SHFE contract at 17,100-17,500 yuan/mt.
Nickel: Three-month LME nickel closed lower last Friday after consecutive sessions of increase last week, falling 1.55% on the day to finish at $13,050/mt. It lost support from the junction of the five- and 10- day moving averages, and the K-indicator may test support from the 10-day moving average today.
Lead: Three-month LME lead hovered in a broad band, as it gave up gains after hit an intraday high of $1,885/mt, ending down 0.43% on the day at $1,874/mt. Support from $1,800/mt and the expectations of gradual downstream demand recovery may trigger a price rally this week.
Tin: Three-month LME tin retreated after rising to a session high of $16,620/mt, closing down $30/mt on the day at $16,555/mt. Pressure above is seen from $16,700/mt.
