SMM Morning Comments (Aug 7): Shanghai base metals rose for the most part, lead surged nearly 2.5%

SHANGHAI, Aug 7 (SMM) — Nonferrous metals on the SHFE mostly increased on Friday morning, holding onto overnight gains, and lead surged nearly 2.5% as of 10:00 Beijing time. Meanwhile, on the LME, base metals prices were mixed.

On the SHFE, nonferrous metals, except for aluminium, cruised higher in overnight trading. Copper added 0.21%, zinc advanced 0.44%, lead surged 1.98%, nickel rose 0.4% and tin edged up 0.03%.

Their counterparts on the LME increased for the most part on Thursday. Aluminium strengthened 0.99%, zinc jumped 1.07%, lead surged 1.93% and nickel increased 1.3%, while copper and tin were nearly flat.

Copper: Three-month LME copper held steady on Thursday and finished the day at $6,486/mt. It is likely to move between $6,460-6,510/mt today. It is likely to move between $6,460-6,510/mt today.

The most-active SHFE 2009 copper contract fluctuated rangebound in overnight trading, ending 0.65% weaker at 14,450 yuan/mt. Weaker demand and continued tensions between the US and China will keep investors cautious. The contract is expected to trade between 51,600-51,900 yuan/mt today, while spot premiums are seen at 40-100 yuan/mt.   

Aluminium: Three-month LME aluminium ended 0.99% higher at $1,778/mt on Thursday.  

The most-liquid SHFE 2009 aluminium contract extended earlier losses and closed 0.65% weaker at 14,450 yuan/mt in overnight trading. It is expected to move between 14,400-14,850 yuan/mt today, while spot premiums are seen at 40-60 yuan/mt over the September contract.  

Zinc: Three-month LME zinc closed 1.07% higher at $2,404/mt in choppy trading on Thursday. Zinc stocks across LME warehouses dipped 150 mt or 0.08% to 187,425 mt. Weak dollar, upbeat jobless data and progress in talks of coronavirus relief package bolstered zinc prices. LME zinc is expected to trade between $2,360-2,410/mt today.

The most-traded SHFE 2009 zinc contract increased 0.44% to end at 19,400 yuan/mt in overnight trading, after hitting a new high of 19,570 yuan/mt earlier in the session. Ample liquidity and supportive monetary policies may further bolster zinc prices. The contract is expected to move between 19,200-19,700 yuan/mt today, while spot premiums for domestic 0# Shuangyan are seen at 80-90 yuan/mt over the September contract.

Nickel: The most-active SHFE 2010 nickel contract soared to a session high of 116,500 yuan/mt as fewer Americans sought jobless benefits in the week ended August 1, but later pared all gains and fell to a session low of 114,150 yuan/mt, before closed 0.4% higher at 115,290 yuan/mt in overnight trading.

Lead: Three-month LME lead ended 1.93% higher at $1,954/mt on Thursday, after hitting an intraday high of $1,972/mt earlier in the session.

The most-active SHFE 2009 lead contract closed 1.98% firmer at 16,460 yuan/mt in overnight trading. Rising gold and silver prices and the prospect of improving domestic demand buoyed lead prices.