SMM Evening Comments (Sep 25): Shanghai nonferrous metals ended mixed

SHANGHAI, Sep 25 (SMM) — SHFE nonferrous metals closed mixed on Friday September 25 as traders monitored news of potential new fiscal stimulus in the US.

Nickel, the best performer, rose 0.99%, aluminium advanced 0.32% and copper climbed 0.39%, while zinc edged down 0.24%, lead weakened 2.75% and tin shed 1%.

SMM data showed that HRC stocks across social warehouses and steelmakers increased 0.75% in the week ended September 24 to 4.06 million mt, after a 2.21% gain in the previous week. The stocks were 25.71% higher than the same period last year.

Inventories of rebar across Chinese steelmakers and social warehouses stood at 11.2 million mt as of Sep 25, down 1.5% from a week ago and up 59.1% from a year earlier.

The ferrous complex fell across the board. Hot-rolled coil fell 0.27%, rebar shed 0.7% and iron ore went down 0.2%.

Copper: The most-traded SHFE 2011 copper contract climbed to an intraday high of 51,170 yuan/mt, before finishing the day 0.39% higher at 51,040 yuan/mt. The U.S. Treasury Secretary tried to push for a new round of negotiations on fiscal stimulus measures, lifting investors' optimistic expectations for economic recovery. The US dollar index temporarily ended its strong rise, showing a slight decline, and copper prices partially rebounded. Whether the contract could move above 51,000 yuan/mt will be monitored tonight.

Aluminium: The most-liquid SHFE 2010 aluminium contract closed up 0.32% at 14,090 yuan/mt today. Open interest fell 22,373 lots to 74,361 lots. Shanghai bonded aluminum ingots stocks rose 1,000 mt on week. With the sharp decline of aluminum prices, the import window narrowed, and the stocks will continue to increase.

Zinc: The most-active SHFE 2011 zinc contract fluctuated around 19,020 yuan/mt and ended 0.24% weaker at 19,070 yuan/mt, Open interest fell 826 lots to 92,769 lots. SMM data showed that social inventories of refined zinc ingots across Shanghai, Tianjin, Guangdong, Jiangsu, Zhejiang, Shandong and Hebei decreased 17,400 mt in the week ended September 25 to 143,400 mt, after an increase of 2,000 mt in the previous week. The contract is expected to fluctuate sideways around 60-day moving average tonight.

Nickel: The most-traded SHFE 2012 nickel contract fluctuated between 112800-113700 yuan/mt in morning trading and finished the day 0.99% higher at 113,610 yuan/mt. Open interest rose 6,087 lots to 94,290 lots. Pressure below is expected to around 113,000 yuan/mt. Whether the contract could move above 114,000 yuan/mt will come under scrutiny tonight.

Lead: The most-traded SHFE 2011 lead contract fell to an intraday low of 14,685 yuan/mt in afternoon trading, and ended 2.75% weaker at 14,695 yuan/mt today. Open interest rose 3,467 lots to 24,783 lots. Fundamental downstream consumption was weak. Overseas pandemics and US-China tensions dampened the macro sentiment of the market with strong pre-holiday risk aversion. The contract is expected to fluctuate and weaken before the holiday. It will test support from 14,700 yuan/mt tonight.

Tin: The most-liquid SHFE 2011 tin contract ended 1% lower at 141,100 yuan/mt today. Open interest fell 4,205 lots to 11,346 lots. Traders are willing to ship the cargoes with active downstream purchase.