SMM Morning Comments (Sep 16): Shanghai base metals traded mixed as investors await Fed meeting

Published: Sep 16, 2020 10:23

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Shanghai base metals traded mixed on Wednesday morning, as investors await a monetary policy announcement from the US Federal Reserve. Meanwhile, their counterparts on the LME were mostly higher.

SHANGHAI, Sep 16 (SMM) — Shanghai base metals traded mixed on Wednesday morning, as investors await a monetary policy announcement from the US Federal Reserve. Meanwhile, their counterparts on the LME were mostly higher.

Shanghai base metals were mostly lower in overnight trading. Copper slid 0.69%, aluminium edged down 0.03%, lead declined 0.27% and nickel weakened 0.45%, while zinc rose 0.53% and tin increased 0.77.

The LME complex performed similarly. Copper weakened 0.32%, aluminium slid 0.47%, lead shed 0.75% and nickel fell 0.16, while zinc strengthened 0.89% and tin climbed 0.52%.

Copper: Three-month LME copper came off a two-week high of $6,829.5/mt to an intraday low of $6,747/mt before reversing some losses to end 0.47% lower at $6,758/mt on Tuesday. It is likely to move between $6,730-6,790/mt today.

The most-active SHFE 2010 copper contract weakened 0.69% to settle at 51,780 yuan/mt in overnight trading, and is expected to trade between 51,500-52,000 yuan/mt today, while spot premiums will be seen at 160-230 yuan/mt.

Overnight, US industrial production for August missed expectations, suggesting a slow recovery in industry production, which deepened market concerns. The US dollar index returned above 93 as the New York Fed’s Empire State business conditions index rose 13.3 points to 17 in September, far higher than expectations, which weighed on copper futures.

Aluminium: Three-month LME aluminium fell 0.47% to settle at $1,793.5/mt on Tuesday, after hitting its highest in two weeks at $1,810.5/mt earlier in the session. It is likely to move between $1,770-1,820/mt today.

The most-liquid SHFE 2010 aluminium contract edged 0.03% lower to end at 14,500 yuan/mt in overnight trading. It is expected to fluctuate between 14,440-14,700 yuan/mt today, while spot premiums are seen at 80-110 yuan/mt.

Zinc: Three-month LME zinc bounced off an intraday low of $2,475/mt to its highest in nearly two weeks of $2,543/mt, before relinquishing some gains to end 0.89% higher at $2,502.5/mt on Tuesday. LME zinc stocks remained unchanged at 219,770 mt. Positive news of coronavirus vaccines, a new pandemic relief plan and expectations of US Federal Reserve’s dovish monetary policies boosted zinc prices. LME zinc is expected to move between $2,480-2,530/mt today.

The most-traded SHFE 2010 zinc contract rose 0.53% to close at 19,940 yuan/mt in overnight trading, after hitting an intraday low of 19,870 yuan/mt earlier in the session. Weak US dollar, positive Chinese economic data and a high season for consumption underpinned zinc prices. The October contract is likely to trade between 19,700-20,200 yuan/mt today, while spot premiums for domestic 0# Shuangyan are seen higher at 260-290 yuan/mt.

Lead: Three-month LME lead came off an intraday high of $1,946/mt to an intraday low of $1,904/mt before wiping out some losses to end 0.75% lower at $1,909.5/mt on Tuesday.

The most-active SHFE 2010 lead contract fell from an intraday high of 15,215 yuan/mt to an intraday low of 14,990 yuan/mt before regaining some ground to close 0.27% weaker at 15,025 yuan/mt in overnight trading. Downstream demand improved, but only provided limited support to lead prices.

Tin: Three-month LME tin increased 0.52% to end at an intraday high of $18,225/mt on Tuesday, after hitting an intraday low of $18,080/mt earlier in the session. Pressure above will be seen from $18,350/mt today.

The most-liquid SHFE 2011 tin contract rebounded from a session low of 143,680 yuan/mt to a session high of 144,990 yuan/mt before ending 0.77% firmer at 144,980 yuan/mt in overnight trading. Pressure above will be seen from 145,500 yuan/mt today.

Market commentary Copper Aluminium Zinc Lead Nicke Tin

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