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SMM Morning Comments (Sep 17): Nonferrous metals fell across the board after the Fed hints low rates until 2023
Sep 17,2020 10:01CST
price review forecast
Source:SMM
Nonferrous metals on both SHFE and LME declined across the board in early trading of Thursday as investors react to developments from the US Federal Reserve which said it would keep interest rates near zero for years until US economy heals from the effect of the coronavirus pandemic.   

SHANGHAI, Sep 17 (SMM) — Nonferrous metals on both SHFE and LME declined across the board in early trading of Thursday as investors react to developments from the US Federal Reserve which said it would keep interest rates near zero for years until US economy heals from the effect of the coronavirus pandemic.   

 

Shanghai base metals, except for aluminium and zinc, closed lower in overnight trading. Copper slid 0.14%, lead fell 0.63%, nickel weakened 0.78% and tin declined 0.25%, while aluminium added 0.14% and zinc advanced 0.2%.

Their counterparts on the LME traded mixed on Wednesday. Copper rose 0.5%, zinc climbed 0.92% and tin inched up 0.14%, while aluminium edged down 0.03%, lead weakened 0.92% and nickel declined 0.16%.

 

Copper: Three-month LME copper rose 0.5% to close at $6,792/mt on Wednesday, and is likely to move between $6,720-6,780/mt today.  

The most-active SHFE 2010 copper contract ended 0.14% lower at 51,740 yuan/mt in overnight trading, after hitting an intraday low of 51,570 yuan/mt earlier in the session. It is expected to trade between 51,400-51,900 yuan/mt today, while spot premiums are seen lower at 60-100 yuan/mt.   

Overnight, US Federal Reserve said it would keep interest rates near zero through 2023 in order to spur inflation, in line with previous expectations. The US dollar index, which tracks the greenback against its peers, returned above 93 as the US central bank expected economic growth to fall by 3.7% this year, an improvement from the 6.5% drop projected in June, and this limited upward space for copper futures. Trades turned active in the spot market as downstream users stockpiled for the upcoming National Day holiday.

 

Aluminium: Three-month LME aluminium fell from an intraday high of $1,804.5/mt to close at an intraday low of $1,789.5/mt on Wednesday. It is likely to fluctuate between $1,770-1,820/mt today.

The most-active SHFE 2010 aluminium contract inched up 0.14% to settle at 14,565 yuan/mt in overnight trading. Commissioning of new capacities and tepid consumption are likely to limit upward space for SHFE aluminium. The October contract is expected to trade between 14,450-14,650 yuan/mt today, while spot premiums are seen higher at about 120 yuan/mt.

 

Zinc: Three-month LME zinc closed 0.92% firmer at $2,525.5/mt in choppy trading on Wednesday. LME zinc stocks dipped 75 mt or 0.03% to 219,625 mt. It is likely to move between $2,490-2,540/mt today.  

The most-traded SHFE 2010 zinc contract settled 0.2% higher at 19,975 yuan/mt in overnight trading. Stable domestic consumption and slightly improved orders for electronic products, hardware and tires from overseas underpinned zinc prices. The October zinc contract is expected to trade between 19,600-20,100 yuan/mt today, while spot premiums for domestic 0# Shuangyan are seen at slightly lower at 260-280 yuan/mt.  

 

Nickel: The most-active SHFE 2011 nickel contract weakened 0.78% to end at 117,190 yuan/mt in overnight trading. Whether the contract could break above 118,000 yuan/mt today will come under scrutiny.  

 

Lead: Three-month LME lead came off an intraday high of $1,921/mt to an intraday low of $1,886.5/mt before reversing some losses to end 0.92% lower at $1,892/mt on Wednesday.

The most-liquid SHFE 2010 lead contract fell from a session high of 15,045 yuan/mt to close 0.63% weaker at 14,930 yuan/mt in overnight trading.  

 

Tin: Three-month LME tin surged to a more than one-week high of $18,335/mt on Wednesday, before relinquishing some gains to end 0.14% higher at $18,250/mt on Wednesday. Pressure above will be seen from $18,510/mt today.  

The most-liquid SHFE 2011 tin contract settled 0.25% weaker at 143,880 yuan/mt in overnight trading. Support below will be seen from the 60-day moving average of 143,200 yuan/mt today.

Market commentary
Copper
Aluminium
Zinc
Nickel
Lead
Tin

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