SMM Evening Comments (Sep 14): Shanghai nonferrous metals rose across the board

Published: Sep 14, 2020 17:49 (GMT+8)
SHFE nonferrous metals closed higher across the board on Monday September 14 as China’s social financing for August exceeded expectations to boost market confidence.

SHANGHAI, Sep 14 (SMM) — SHFE nonferrous metals closed higher across the board on Monday September 14 as China’s social financing for August exceeded expectations to boost market confidence.

 

The People's Bank of China (PBOC) injected 80 billion yuan (about 11.7 billion U.S. dollars) into the market through seven-day reverse repos at an interest rate of 2.2 percent, according to a statement on the website of the central bank.

 

Zinc was the best performer with a rise of 2.59%. Cooper advanced 0.97%, aluminium edged up 0.73%, tin climbed 1.51%, lead increased 1.01% and nickel went up 2.48%.

 

SMM data showed that social inventories of refined zinc ingots across Shanghai, Tianjin, Guangdong, Jiangsu, Zhejiang, Shandong and Hebei decreased 4,800 mt from September 11 to 154,000 mt as of September 14. The stocks were down 17,200 mt from last Monday September 7.

 

The ferrous complex also traded higher. Iron ore increased 2.41%, rebar rose 0.47%, and hot-rolled coil gained 0. 8%.

 

Copper: The most-traded SHFE 2010 copper contract surged to an intraday high of 52,530 yuan/mt, before giving some gains to end 0.97% higher at 52,120 yuan/mt today. China's credit growth rate announced on Friday exceeded expectations in August, relatively easing the market's worries about marginal tightening of monetary policy. The People's Bank of China (PBOC) is injecting 80 billion yuan through seven-day reverse bond repurchase agreements to maintain liquidity, supporting copper prices above 52,000 yuan/mt. Whether the contract could remain above 52,000 yuan/mt will come under scrutiny tonight.

 

Aluminium: The most-liquid SHFE 2010 aluminium contract climbed to an intraday high of 14,540 yuan/mt after opening and finished the day 0.73% higher at 14,515 yuan/mt. Open interest fell 980 lots to 126,000 lots. The change of the basis and the flow of the fund will come under scrutiny.

 

Zinc: The most-active SHFE 2010 zinc contract finished the day 2.59% higher at 19,770 yuan/mt today. Open interest fell 3,365 lots to 83,843 lots. Downstream purchase improved at low prices this week, and social inventories continued to decline. The contract is expected to break through the above moving average tonight.

 

Nickel: The most-traded SHFE 2011 nickel contract closed up 2.48% at 118,820 yuan/mt today. Open interest rose 8,512 lots to 118,820 lots. The trend of the US crude oil will be monitored tonight.

 

Lead: The most-traded SHFE 2010 lead contract slipped to a session low of 14,830 yuan/mt, before closing 1.01% higher at an intraday high of 15,075 yuan/mt. Open interest fell 871 lots to 26,285 lots. Fundamental scrap battery prices are unlikely to drop, as secondary lead is reluctant to sell, improving the downstream purchasing sentiment compared with the previous period. Whether the contract could remain above 15,000 yuan/mt will be watched tonight.

 

Tin: The most-liquid SHFE 2011 tin contract rose to an intraday high of 145,240 yuan/mt and ended 1.51% higher at 144,820 yuan/mt today. Open interest fell 1,528 lots to 21,749 lots. Pressure above is expected to around 10-day moving average of 145,500 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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