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SMM Morning Comments (Sep 25): Shanghai base metals were mostly lower on COVID-19 concerns and disappointing US jobless data
Sep 25,2020 10:06CST
price review forecast
Source:SMM
Shanghai base metals cruised lower for the most part on Friday morning, and their counterparts on the LME traded mixed, as US jobless claims saw an unexpected increase for the week ended September 19, suggesting a stalled recovery in the labour market, and as coronavirus resurgence in Europe prompted several countries to reimpose travel restrictions.  

SHANGHAI, Sep 25 (SMM) — Shanghai base metals cruised lower for the most part on Friday morning, and their counterparts on the LME traded mixed, as US jobless claims saw an unexpected increase for the week ended September 19, suggesting a stalled recovery in the labour market, and as coronavirus resurgence in Europe prompted several countries to reimpose travel restrictions.  

 

Shanghai base metals traded lower for the most part in overnight trading. Copper shed 0.12%, aluminium fell 0.32%, zinc weakened 0.68%, lead declined 1.72% and tin slid 1.7%, while nickel outperformed with a 0.81% gain.

The LME complex also fell broadly on Thursday. Copper slid 0.3%, aluminium weakened 0.4%, lead slipped 0.53%, nickel shed 0.17%, tin fell 1.27%, and zinc closed flat.

 

Copper: Three-month LME copper fell to its lowest in more than one month at $6,449/mt before rebounding to settle 0.3% lower at $6,576/mt on Thursday. It is expected to move between $6,520-6,600/mt today. LME copper stocks continued their declines, maintaining at a low level in history, which underpinned copper prices.  

The most-active SHFE 2011 copper contract plunged to a more than one-month low of 49,980 yuan/mt after the bell, but later climbed to settle 0.12% weaker at 50,780 yuan/mt in overnight trading.

Overnight, US initial claims for unemployment benefits rose unexpectedly for the week ended September 19, suggesting a stalled recovery in the labour market. US Federal Reserve Chairman Jerome Powell reaffirmed that economic recovery needs more fiscal stimulus, but the Democrats and Republicans remained in a stalemate over more stimulus package, which weighed on sentiment. US dollar index traded at a two-month high as coronavirus cases surged in Europe.

 

Zinc: Three-month LME zinc closed flat at $2,410.5/mt on Thursday, after hitting its lowest in nearly two months at $2,354/mt earlier in the session. Zinc stocks across LME-listed warehouses expanded 2,000 mt or 0.91% to 221,300 mt. US Federal Reserve officials reiterated to maintain an easy monetary policy, which calmed panic sentiment, but the number of Americans filing for jobless benefits increased unexpectedly last week and the US Congress remained in a stalemate over more fiscal stimulus, which cast a shadow over the market. LME zinc is expected to move between $2,370-2,420/mt today.

The most-traded SHFE 2010 zinc contract dropped to a near two-month low of 18,680 yuan/mt after the bell, but later gained back all the losses before ending 0.68% weaker at 18,985 yuan/mt in overnight trading. Downstream users in Guangdong and Tianjin stockpiled actively ahead of the National Day holidays, while buyers in Shanghai restocked only as required. The November contract is likely to trade between 18,800-19,300 yuan/mt today, while spot premiums for domestic 0# Shuangyan are seen lower at 140-170 yuan/mt against the October contract.  

 

Nickel: The most-active SHFE 2012 nickel contract trended higher in overnight trading, closing 0.76% firmer at 113,350 yuan/mt. Whether the contract could steady above 113,000 yuan/mt today will be monitored.

 

Lead: Three-month LME lead dropped from an intraday high of $1,880/mt to fall to its lowest in nearly two months at $1,850/mt, before regaining some ground to end 0.53% lower at $1,867.5/mt on Thursday.

The most-active SHFE 2010 lead contract fell 1.72% to close at 14,850 yuan/mt in overnight trading, after hitting its lowest in two months at 14,750 yuan/mt earlier in the session.  

 

Tin: Three-month LME tin settled 1.27% lower at $17,475/mt on Thursday, and support below will be seen from $172,000/mt today.

The most-liquid SHFE 2011 tin contract weakened 1.7% to end at 140,100 yuan/mt in overnight trading, and support below will be seen from 138,500 yuan/mt today.

Market commentary
Copper
Zinc
Lead
Nickel
Tin

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