SMM Evening Comments (Sep 28): Shanghai nonferrous metals rose across the board

Published: Sep 28, 2020 17:24

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SHFE nonferrous metals closed higher across the board on Monday September 28.

SHANGHAI, Sep 28 (SMM) — SHFE nonferrous metals closed higher across the board on Monday September 28.

Markets are receiving a boost Monday from signs that the Chinese economic recovery is gathering steam, with fiscal stimulus, pent-up demand and positive export data boosting sentiment and meaning European markets are set for a positive handover from Asia-Pacific.

Aluminium was the best performer with a rise of 2.32%. Copper advanced 1.31%, lead edged up 1.15%, tin climbed 1.12%, zinc increased 0.66% and nickel went up 0.71%.

SMM data showed that social inventories of refined zinc ingots across Shanghai, Tianjin, Guangdong, Jiangsu, Zhejiang, Shandong and Hebei fell 2,800 mt from last Friday September 25 to 140,600 mt as of Monday September 28. The stocks were down 19,500 mt from last Monday September 21.

The ferrous complex closed mixed. Iron ore advanced 0.92%, rebar rose 0.08%, while hot-rolled coil fell 0.03%.

Copper: The most-traded SHFE 2011 copper contract rose to an intraday high of 51,350 yuan/mt, before finishing the day 1.31% higher at 51,220 yuan/mt. The People's Bank of China (PBOC) carried out reverse repurchase for 8 consecutive working days to ensure abundant liquidity across seasons, which boosted investor confidence. Whether the contract could maintain above 51,000 yuan/mt will come under scrutiny tonight.

Aluminium: The most-liquid SHFE 2011 aluminium contract fluctuated between 14,000-14,100 yuan/mt in morning trading and finished the day 2.32% higher at 14,100 yuan/mt. Open interest fell 22,373 lots to 74,361 lots. Pre-holiday downstream stockpiling led to a sharp decrease in aluminum ingot inventories.

Zinc: The most-active SHFE 2011 zinc contract ended 0.66% higher at 19,055 yuan/mt today. Open interest fell 1,901 lots to 90,868 lots. China imported 410,700 mt of zinc concentrate in August, up 142,400 mt from July and 161,000 mt from the same period last year. The contract is expected to fluctuate rangebound tonight.

Nickel: The most-traded SHFE 2012 nickel contract fluctuated between 112,000-112,400 yuan/mt in morning trading and closed up 0.71% at 113,470 yuan/mt today. Open interest rose 6,407 lots to 100,697 lots. The contract is expected to trade between 111,000-116,000 yuan/mt ahead of the National Day holidays.

Lead: The most-traded SHFE 2011 lead contract climbed to an intraday high of 15,070 yuan/mt this afternoon, before recouping some gains to finish the day 1.15% higher at 14,995 yuan/mt. Open interest fell 1,638 lots to 23,145 lots. The contract is expected to remain in choppy trading ahead of the National Day holidays. Whether the contract could move above 15,000 yuan/mt will be watched tonight.

Tin: The most-liquid SHFE 2011 tin contract fell to an intraday low of 138,180 yuan/mt and ended 1.12% higher at 141,720 yuan/mt today. Open interest fell 2,842 lots to 8,504 lots. US dollar index, overseas pandemic and domestic inventories will come under scrutiny.

Evening comments Copper Aluminium Nickel Zinc Lead Tin

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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