SMM Morning Comments (Sep 23): Shanghai base metals fell broadly on coronavirus concerns

Published: Sep 23, 2020 10:10 (GMT+8)

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Nonferrous metals on both SHFE and LME were mostly lower on Wednesday morning, as surging coronavirus cases prompted countries to impose fresh restrictions on public life.

SHANGHAI, Sep 23 (SMM) — Nonferrous metals on both SHFE and LME were mostly lower on Wednesday morning, as surging coronavirus cases that prompted countries to impose fresh restrictions on public life stoked worries among investors.

Shanghai base metals closed mixed in overnight trading. Copper edged up 0.02%, lead rose 0.73% and tin advanced 1.42%, while zinc fell 0.31%, nickel slid 0.26% and aluminium closed flat.

The LME complex also settled mixed on Tuesday. Copper rose 1.26%, nickel strengthened 0.28% and tin firmed 1%, while aluminium shed 0.17%, zinc weakened 0.14% and lead slid 0.5%.

Copper: Three-month LME copper rose 1.26% to end at $6,768/mt on Tuesday, and is expected to move between $6,700-6,750/mt today.

The most-active SHFE 2010 copper contract edged up 0.02% to close at 51,760 yuan/mt in overnight trading, and is likely to trade between 51,300-51,800 yuan/mt today, while spot premiums are seen lower at 10-50 yuan/mt.

Federal Reserve Chairman Jerome Powell said on Tuesday that the US economy could start to decelerate in the months ahead if there is no further fiscal stimulus from the Congress, and this, combined with a second wave of coronavirus stoked worries among investors.

Aluminium: Three-month LME aluminium weakened 0.17% to close at $1,779/mt on Tuesday, after hitting its lowest in nearly two weeks earlier in the session.

The most-liquid SHFE 2010 aluminium closed flat at 14,590 yuan/mt in overnight trading, and is expected to trade between 14,450-14,800 yuan/mt today, while spot premiums are seen lower at 110-130 yuan/mt.

Zinc: Three-month LME zinc shed 0.14% to end at $2,468.5/mt in choppy trading on Tuesday. Zinc stocks across LME-listed warehouses dipped 25 mt to 219,300 mt. Stronger US dollar, surging coronavirus cases and renewed restrictions deepened doubts on global economic recovery from the pandemic, weighing on zinc prices. LME zinc is likely to move between $2,450-2,500/mt today.

The most-traded SHFE 2010 zinc contract ended 0.31% weaker at 19,495 yuan/mt in overnight trading. A fast-spreading second wave of COVID-19 and uncertainty over US-China relations boosted risk-aversion sentiment among investors, dragging on zinc prices. However, expectations of tight zinc concentrate supply in Q4 and demand from infrastructure construction will limit the downward space for SHFE zinc. The November contract is likely to fluctuate between 19,300-19,800 yuan/mt today, while spot premiums for domestic 0# Shuangyan are seen lower at 150-170 yuan/mt against the October contract.

Nickel: The most-liquid SHFE 2011 nickel contract fluctuated between 112,900-113,600 yuan/mt in overnight trading, falling 0.26% to end at 112,920 yuan/mt. Whether the contract could touch the 114,000 yuan/mt mark will be monitored today.

Lead: Three-month LME lead settled 0.5% lower at $1,887.5/mt on Tuesday.

The most-active SHFE 2010 lead contract climbed to a near two-week peak of 15,240 yuan/mt after the bell, but later moved lower to end 0.73% higher at 15,145 yuan/mt in overnight trading. Lead prices is expected to undergo a period of consolidation before the National Day holidays.

Tin: Three-month LME tin climbed to an intraday high of $18,315/mt before paring some gains to end 1% firmer at $18,250/mt on Tuesday. Pressure above will be seen from $18,330/mt today.

The most-liquid SHFE 2011 tin contract rose 1.42% to settle at 145,950 yuan/mt in overnight trading, after hitting an intraday high of 146,460 yuan/mt earlier in the session. Pressure above will be seen from the 148,000 yuan/mt mark today.

Market commentary Copper Aluminium Lead Zinc Nickel Tin

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