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SMM Evening Comments (Feb 27): Shanghai base metals mostly lower on virus fears
Feb 27, 2020 17:24CST
Source:SMM
On the SHFE, nickel remained the biggest loser, shedding 0.8% on the day. Aluminium fell 0.6%, copper lost 0.5%, tin and lead declined some 0.2%, while zinc inched up less than 0.1%.

SHANGHAI, Feb 27 (SMM) – Shanghai base metals cruised mostly lower on Thursday, as the COVID-19 coronavirus continues to spread, particularly outside China.

 

Stocks and oil prices extended recent losses, while gold prices held around multi-year highs.

 

On the Shanghai Futures Exchange, nickel remained the biggest loser, shedding 0.8% on the day. Aluminium fell 0.6%, copper lost 0.5%, tin and lead declined some 0.2%, while zinc inched up less than 0.1%. Meanwhile, their counterparts on the London Metal Exchange moved lower across the board.

 

The SHFE has suspended night trading session until further notice.

 

Copper: The most-traded SHFE 2004 contract extended its decline, shedding 0.5% on the day to end at 45,440 yuan/mt, its lowest close in three weeks. SHFE copper is expected to remain subdued till the epidemic across the globe peaks. Whether it could remain above 45,400 yuan/mt will come under scrutiny tomorrow.

 

Aluminium: The most-active SHFE 2004 contract extended its losses, plumbing a new one-year low of 13,410 yuan/mt before closing down 0.59% at 13,430 yuan/mt. SMM data showed that social inventories of primary aluminium in China continued to trend higher this week, as demand recovered slowly.

 

Zinc: The most-liquid SHFE 2004 contract hovered in a 30 yuan/mt range around 16,500 yuan/mt during the day, and closed slightly higher at 16,460 yuan/mt. This came after four consecutive days of losses, suggesting that bearish sentiment eased.   

Chihong Zinc and Germanium’s zinc smelter in Hulun Buir, Inner Mongolia suspended production on Wednesday afternoon as the electrolysis system broke down. It is expected to take about a month for the smelter with refined zinc capacity of 140,000 mt/year, to restart production.

The news provided limited support to SHFE zinc, as the affected production is not significant enough to counter the anticipated production recovery from curtailments or maintenance at a raft of zinc smelters in China in March.  

 

Nickel: The most-traded SHFE 2004 contract slid to a low of 100,380 yuan/mt in early morning trade, which is lower than the trough hit amid the broad plunge on the first trading day after the Lunar New Year holiday and marks the lowest in more than seven months. The contract later recovered some ground to end the day 0.81% lower at 100,780 yuan/mt.

 

Lead: The most-liquid SHFE 2004 contract rebounded from an intraday low of 14,460 yuan/mt to an intraday high of 14,590 yuan/mt, before it erased those gains to close the day 0.17% weaker at 14,520 yuan/mt. Slow recovery of secondary lead smelters supported SHFE lead, which is expected to remain rangebound in the near term.

 

Tin: The most-traded SHFE 2006 contract slipped to a near one-week low of 135,340 yuan/mt, before it clawed back some losses to end the day 0.23% lower at 136,230 yuan/mt.

Evening comments
Copper
Aluminium
Zinc
Nickel
Tin
Lead

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