SMM Evening Comments (Mar 13): Shanghai base metals closed mixed in virus-led rout

Published: Mar 13, 2020 18:57
On the Shanghai Futures Exchange, copper closed the day up 0.3% and aluminium gained 0.4%. Tin tumbled nearly 3% to lead the be worst performer, nickel dropped 1.1%, lead fell 0.9% and zinc slipped 0.6%. Base metals on the London Metal Exchange extended the rally in European trading hours. The comeback was strong, with nickel jumping more than 7% on the day as of 18:30 Beijing time.

SHANGHAI, Mar 13 (SMM) – Shanghai base metals closed mixed on Friday, after global stock markets suffered a historic wave of selling.

 

Metals recovered somewhat after a plunge in early morning trade, with copper and aluminium finishing the day in the green.

 

On the Shanghai Futures Exchange, copper closed the day up 0.3% and aluminium gained 0.4%. Tin tumbled nearly 3% to lead the be worst performer, nickel dropped 1.1%, lead fell 0.9% and zinc slipped 0.6%.

Base metals on the London Metal Exchange extended the rally in European trading hours. The comeback was strong, with nickel jumping more than 7% on the day as of 18:30 Beijing time.  

 

The People's Bank of China announced on late Friday that it is cutting reserve requirement ratio (RRR) for some financial institutions by 0.5 to 1 percentage point and release 550 billion yuan in liquidity to shore up economy amid the COVID-19 outbreak, effective from March 16.

 

The SHFE has suspended night trading session until further notice.

 

Copper: The most-traded SHFE 2005 contract hit a new 40-month low of 42,740 yuan/mt in early morning trade, before it rebounded to end at 43,650 yuan/mt. The contract remains under pressure from moving averages. Whether it could hold onto the 43,000 yuan/mt level will come under scrutiny next week.

 

Aluminium: The most-active SHFE 2005 contract rebounded swiftly in early afternoon trade, returning above 13,000 yuan/mt, before it eased to end at 12,920 yuan/mt.

 

Zinc: The most-liquid SHFE 2005 contract hit an intraday low of 15,505 yuan/mt in early morning trade, before it clawed back some losses to end at 15,805 yuan/mt. The contract now sits below all near-term moving averages and is expected to trade rangebound on hopes for more stimulus measures.

 

Nickel: The most-traded SHFE 2006 contract slipped to a nine-month trough of 96,200 yuan/mt after kicking off the day with a lower open. It later recovered to end at 99,300 yuan/mt. Whether SHFE nickel could follow its LME counterpart higher, returning above 100,000 yuan/mt will come under scrutiny next week.

 

Lead: The most-liquid SHFE 2005 contract slipped to an intraday low of 14,040 yuan/mt in early morning trade, within spitting distance of a one-month low of 14,030 yuan/mt plumbed on Monday. It later recovered some ground to end at 14,150 yuan/mt. Positive fundamentals failed to help SHFE lead weather the broad decline.  

 

Tin: The most-traded SHFE 2006 contract fell to its lowest since July 2016 at 126,830 yuan/mt in morning trade. It later recovered to end at 129,800 yuan/mt, to produce a weekly decline of 4.3%, the biggest in seven months. Support is seen at 126,500 yuan/mt.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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