SHANGHAI, Feb 21 (SMM) – SHFE nonferrous metals opened lower across the board on Friday. An elevated US dollar sent all LME base metals lower overnight, with zinc leading the losses with a drop of 1.2%. Nickel slipped 0.9%, copper and aluminium declined 0.8%, lead fell 0.7%, and tin shed 0.2%. The SHFE night trading session remained suspended.
Copper: Three-month LME copper declined on Thursday as upbeat US manufacturing data lifted the US dollar, while demand for safe-haven assets buoyed gold prices to the highest in nearly seven years. LME copper slipped 0.8% overnight to close at $5,737.5/mt. With pressure from the five- and 10- day moving averages, it is expected to trade between $5,720-5,780/mt, with the most-traded SHFE contract at 46,000-46,400 yuan/mt. While most downstream processing companies in China have restarted work, it requires time for fundamentals to improve given the current inventory pressure and logistics hurdles. Spot discounts are expected at 250-200 yuan/mt today.
Aluminium: Three-month LME aluminium hovered weakly around $1,710/mt and finished the session 0.75% lower at $1,712/mt. Trading range is expected at $1700-1740/mt today with the most-traded SHFE contract at 13,500-13,800 yuan/mt.
Zinc: Three-month LME zinc fell to a session low of $2,109/mt amid loaded-up shorts, and ended the trading day 1.24% lower at $2,116.5/mt. LME zinc inventories increased 875 mt to 75,475 mt. Any downsides in zinc prices, however, will be limited as some smelters in China have cut production on the back of rising inventories of sulphuric acid. Today, LME zinc is expected to trade between $2,100-2,150/mt with the most-liquid SHFE contract at 17,000-17,500 yuan/mt.
Nickel: Three-month LME nickel tested the $125,000/mt level, ending $310/mt lower on the day at $12,740/mt. Support from $125,000/mt will continue to be watched today.
Lead: Three-month LME lead fell for the second consecutive day, losing 0.67% on the day to finish at $1,861.5/mt. Support remained from the 10-day moving average.
Tin: Three-month LME tin moved in a broad band as it recovered after slide to a session low of $16,410/mt, ending at $16,565/mt, down $25/mt on the day. LME tin inventories shrank 50 mt to 7,435 mt. It is likely to trade with support from $16,300/mt today.