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SMM Morning Comments (Sep 7): Shanghai base metals were mostly higher on upbeat US jobs data
Sep 7,2020 09:56CST
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Source:SMM
Shanghai base metals broadly rose on Monday morning as positive US jobs data boosted market sentiment, and the LME complex increased across the board.

SHANGHAI, Sep 7 (SMM) — Shanghai base metals rose broadly on Monday morning as positive US jobs data boosted market sentiment, and the LME complex increased across the board.

 

On the LME, nonferrous metals rose across the board on last Friday. Copper jumped 3%, aluminium added 0.9%, zinc advanced 0.64%, lead rose 1.93%, nickel strengthened 1.73% and tin edged up 0.25%.

Their counterparts on the SHFE, except for zinc, closed higher on Friday night. Copper jumped 2.26%, aluminium climbed 0.39%, lead inched up 0.16%, nickel added 0.47% and tin advanced 0.23%, while zinc underperformed with a 0.28% loss.

 

Copper: Three-month LME copper trended higher on Friday, surging 3% to close at $6,780/mt. It is expected to move between $6,760-6,840/mt today.

The most-active SHFE 2010 copper contract jumped 2.26% to settle at 52,560 yuan/mt on Friday night, and is likely to trade between 52,200-52,800 yuan/mt today, with spot premiums lower at 30-100 yuan/mt.  

US nonfarm payrolls increased by 1.37 million in August, and the unemployment rate tumbled to 8.4%. The continued recovery in the economy boosted optimism among investors, sending copper prices higher. In addition, LME copper stocks recorded new lows, which also contributed to the increase in copper prices.

 

Aluminium: Three-month LME aluminium plunged to an intraday low of $1,773.5/mt before wiping out all earlier losses to end 0.9% firmer at $1,792/mt on Friday. It is likely to trade between $1,760-1,820/mt today.  

The most-liquid SHFE 2010 aluminium contract settled 0.39% higher at 14,340 yuan/mt on Friday night. Aluminium social inventories built up slowly amid moderate downstream demand. The contract is likely to trade between 14,350-14,650 yuan/mt today, while spot premiums are seen lower at 0-20 yuan/mt.

 

Zinc: Three-month LME zinc rose 0.64% to end at $2,507.5/mt in choppy trading on Friday, as increased US nonfarm payrolls drove up market sentiment. Zinc stocks across LME-listed warehouses continued its slight fall, dipping 50 mt or 0.02% to 220,050 mt. It is expected to move between $2,480-2,530/mt today.

The most-traded SHFE 2010 zinc contract fell 0.28% to close at 19,885 yuan/mt on Friday night. Domestic smelters lowered treatment charges (TCs) for zinc concentrate as they worried about its supply in the fourth quarter. Zinc social inventories rose slightly due to the environmental inspections in Tianjin, but improved demand from infrastructure construction and overseas market will underpin zinc prices. The October zinc contract is likely to trade between 19,800-20,300 yuan/mt today, while spot premiums for domestic 0# Shuangyan are seen slightly higher at 90-100 yuan/mt.

 

Nickel: The most-active SHFE 2011 nickel contract settled 0.47% higher at 119,690 yuan/mt on Friday night. Whether the contract could break above the 120,000 yuan/mt mark will come under scrutiny today.

In terms of fundamentals, high scheduled production of #300 stainless steel in Q3 will ease oversupply of high-grade NPI. Fewer imports of spot nickel kept domestic social inventories stable, though refined nickel consumption was weak.

 

Lead: Three-month LME zinc bounced back from an intraday low of $1,936/mt to close 1.93% firmer at an intraday high of $1,978/mt on Friday.   

The most-active SHFE 2010 lead contract inched up 0.16% to end at 15,550 yuan/mt on Friday night.

 

Tin: Three-month LME tin rebounded from an intraday low of $18,185/mt to an intraday high of $18,350/mt on Friday, before paring some gains to end 0.25% higher at $18,185/mt. Support below will be seen from the five-day moving average of $18,207/mt today.  

The most-liquid SHFE 2011 tin contract inched up 0.23% to close at 146,060 yuan/mt on Friday night, after hitting a session high of 146,900 yuan/mt earlier in the session. It is expected to move between 145,000-147,500 yuan/mt today.  

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