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SMM Morning Comments (Sep 24): Nonferrous metals fell across the board as the dollar extended gains
Sep 24,2020 10:01CST
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Source:SMM
Nonferrous metals on both SHFE and LME declined across the board in early trading of Thursday as the US dollar index, which measures the greenback against a basket of its peers, returned above 94 overnight to its highest in more than eight weeks, posting a four-day winning streak.

SHANGHAI, Sep 24 (SMM) — Nonferrous metals on both SHFE and LME declined across the board in early trading of Thursday as the US dollar index, which measures the greenback against a basket of its peers, returned above 94 overnight to its highest in more than eight weeks, posting a four-day winning streak.

 

Shanghai base metals, except for lead and nickel, closed lower in overnight trading. Copper fell 1.26%, aluminium declined 2.91%, zinc shed 1.26% and tin weakened 1.72%, while lead and nickel edged up 0.07% and 0.05% respectively.

The LME complex fell across the board on Wednesday. Tin plunged 3.01% to lead the losses, copper fell 2.55%, aluminium weakened 1.38%, zinc slid 2.35%, lead edged down 0.53% and nickel slipped 1.27%.

 

Copper: Three-month LME copper fell 2.55% to close at $6,595.5/mt on Wednesday, and is likely to move between $6,530-6,600/mt today.

The most-active SHFE 2011 copper contract settled 1.26% lower at 50,920 yuan/mt in overnight trading. It is expected to trade between 51,000-51,500 yuan/mt today, and spot cargoes are likely to be offered between discounts of 20 yuan/mt to premiums of 60 yuan/mt.

Overnight, US manufacturing purchasing managers’ index (PMI) came in at 53.5 in September, hitting a fresh high in 20 months, the latest manufacturing activity survey from IHS/Markit research showed on Wednesday. The US dollar index returned above 94, pressure copper futures. Besides, negotiations on a new US economic stimulus package remained in a deadlock, which also weighed on copper prices.

 

Aluminium: Three-month LME aluminium trended lower on Wednesday, ending 1.38% weaker at $1,754.5/mt.  

The most-active SHFE 2011 aluminium contract fell below 14,000 yuan/mt after the bell to a session low of 13,775 yuan/mt before reversing some losses to close 2.91% lower at 13,865 yuan/mt in overnight trading. The precious complex extended declines last night, and nonferrous metals also followed them lower. The November contract is likely to move between 13,700-14,050 yuan/mt today, while spot premiums are seen at 140-160 yuan/mt.  

 

Zinc: Three-month LME zinc dropped from an intraday high of $2,468/mt to an intraday low of $2,401.5/mt before wiping out some losses to close 2.35% weaker at $2,410.5/mt on Wednesday. LME zinc stocks remained unchanged at 219,300 mt. Stronger US dollar index, rising global coronavirus cases and weak economic data stoked boosted risk-aversion sentiment. LME zinc is expected to trade between $2,400-2,450/mt today.

The most-traded SHFE 2011 zinc contract shed 1.26% to end at 19,155 yuan/mt in overnight trading. Domestic zinc smelters started to stockpile raw materials in advance for winter, and some mines are likely to suspend production in October, which will further tighten supply of zinc concentrate. In addition, lower treatment charges narrowed smelters’ profits, which is likely to drive them to trim output. The November zinc contract is likely to fluctuate between 19,000-19,500 yuan/mt today, while spot premiums for domestic 0# Shuangyan are seen slightly higher at 150-180 yuan/mt against the October contract.  

 

Nickel: The most-active SHFE 2011 nickel contract edged up 0.05% to close at 112,820 yuan/mt in overnight trading. Pressure above from the 113,000 yuan/mt mark will be watched today.  

 

Lead: Three-month LME lead came off an intraday high of $1,890/mt to fall to an intraday low of $1,862/mt before regaining some ground to end 0.53% lower at $1,877.5/mt on Wednesday.

The most-liquid SHFE 2010 lead contract generated a V-shaped movement in overnight trading, ending 0.07% firmer at 15,135 yuan/mt.

 

Tin: Three-month LME tin moved lower on Wednesday, plunging 3.01% to end at $17,700/mt. Support below will be seen from the $17,500/mt mark today.

The most-liquid SHFE 2011 tin contract dropped 1.72% to settle at 143,120 yuan/mt in overnight trading, and support below will be seen from around 140,000 yuan/mt today.  

Market commentary
Copper
Aluminium
Zinc
Nickel
Lead
Tin

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