SMM Morning Comments (Sep 28): Shanghai base metals rose broadly, the LME complex traded mixed

SHANGHAI, Sep 28 (SMM) — Shanghai base metals were mostly higher on Monday morning, while their counterparts on the LME set for a mixed start, as investors continue to monitor the developments on further fiscal stimulus and rising coronavirus cases in Europe.

Shanghai base metals fell for the most part on Friday night. Zinc edged down 0.05%, lead weakened 0.13%, nickel fell 0.49% and tin slid 0.96%, while copper rose 0.61% and aluminium added 0.87%.

The LME complex were also finished in negative territory on Friday. Copper slid 0.36%, zinc declined 1.49%, lead slipped 1.58% and tin fell 2.52%, while aluminium strengthened 0.83% and nickel edged up 0.17%.

Copper: Three-month LME copper ended 0.36% weaker at $6,552/mt in choppy trading on Friday, and is expected to move between $6,550-6,630/mt today.  

The most-active SHFE 2011 copper contract climbed 0.61% to settle at 50,870 yuan/mt on Friday night, and is likely to trade between 50,700-51,200 yuan/mt today, while spot premiums will be seen at 20-80 yuan/mt.

August orders for US durable goods rebounded for four straight months, but remained 11.4% below the previous level. The US dollar surged last week, at one point climbing to around 94.74, a fresh high in nearly two months, which weighed on copper futures. Besides, lack of progress in new US fiscal stimulus also pressured copper prices.   

Aluminium: Three-month LME aluminium strengthened 0.83% to close at $1,762/mt on Friday, and is likely to move between $1,750-1,780/mt today.

The most-liquid SHFE 2011 aluminium contract ended 0.87% firmer at 13,900 yuan/mt on Friday night, and is expected to trade between 13,800-14,200 yuan/mt today, while spot premiums will be seen higher at 280-340 yuan/mt.

Nickel: The most-active SHFE 2012 nickel contract closed 0.49% weaker at 112,120 yuan/mt in choppy trading on Friday night.

Zinc: Three-month LME zinc dropped from an intraday high of $2,415.5/mt to an intraday low of $2,361/mt before regaining some ground to close 1.49% lower at $2,374.5/mt on Friday. Zinc stocks across LME-listed warehouses fell 950 mt or 0.43% to 220,350 mt. Stronger US dollar and worries about a second wave of COVID-19 weighed on market sentiment, but better-than-expected orders for US durable goods for August may boost sentiment. LME zinc is expected to trade between $2,370-2,420/mt today.

The most-traded SHFE 2011 zinc contract edged down 0.05% to end at 18,920 yuan/mt on Friday night. Treatment charges (TCs) extended declines, suggesting a tight zinc concentrate supply and continued falls in zinc social inventories, which underpinned zinc prices. The November zinc contract is likely to move between 18,800-19,300 yuan/mt today, while spot premiums for domestic 0# Shuangyan are seen at 150-160 yuan/mt against the October contract.

Lead: Three-month LME lead fell 1.58% to end at $1,838/mt on Friday, after hitting its lowest in nearly two months at $1,827/mt earlier in the session.

The most-active SHFE 2011 lead contract opened at a more than two-month low of 14,545 yuan/mt on Friday night, but rebounded to close 0.13% weaker at 14,805 yuan/mt.  

Tin: Three-month LME tin tended lower on Friday, shedding 2.52% to end at $17,035/mt, after hitting its lowest in more than one month at $16,960/mt earlier in the session. Support below will be seen from around $16,700/mt today.  

The most-liquid SHFE 2011 tin contract plunged to its lowest in nearly three months on Friday night, before climbing to end 0.96% weaker at 138,800 yuan/mt. Support below will be seen from around 137,000 yuan/mt today.