SMM Morning Comments (Oct 9): Shanghai base metals were mostly higher as they return to trade

Published: Oct 9, 2020 10:45

Save

Shanghai base metals cruised higher for the most part as they returned to trade on Friday morning from holidays, and their counterparts on the LME rose across the board.

SHANGHAI, Oct 9 (SMM) — Shanghai base metals cruised higher for the most part as they returned to trade on Friday morning from holidays, and their counterparts on the LME rose across the board.

A private survey showed services sector activity in China expanded in September. The Caixin/Markit services Purchasing Managers’ Index for September came in at 54.8. PMI readings above 50 signify expansion, while those below that level indicate contraction.

Copper: Three-month LME copper plunged by 5.14% on October 1 on uncertainties over US stimulus packages, and further tumbled below the $6,300/mt mark after US president Donald Trump and his wife Melania tested positive for COVID-19. But currently, LME copper has rebounded to near the Bollinger band, basically reversing earlier losses. Copper stocks across LME-listed warehouses had risen for three consecutive days to 166,000 mt before the National Day holidays, pressuring copper prices, though they fell slightly during the holidays. LME copper is expected to trade between $6,640-6,700/mt today.

The most-active SHFE 2011 copper contract closed at 50,930 yuan/mt as of September 30, with open interest reaching 104,000 lots. It is likely to trade between 51,300-52,000 yuan/mt today.

Aluminium: Three-month LME aluminium settled at $1,799/mt on Thursday, up $36/mt from the closing price on September 30. Market sentiment improved as the effect of easy US monetary policies offset worries about a second wave of coronavirus cases. LME aluminium is likely to fluctuate between $1,780-1,820/mt today.

The most-liquid SHFE 2011 aluminium contract closed at 14,145 yuan/mt as of September 30, and is expected to move between 14,300-14,700 yuan/mt today.

Zinc: Three-month LME zinc ended 0.72% higher at $2,384/mt on Thursday, after hitting an intraday high of $2,389.5/mt earlier in the session. Zinc stocks across LME-listed warehouses shrank 425 mt or 0.19% to 217,975 mt. Optimism over a fresh US fiscal stimulus and falling US initial claims for jobless benefits in the week ended October 3 underpinned zinc prices, but rising COVID-19 cases capped gains. LME zinc is likely to trade between $2,350-2,400/mt today.

SMM data showed that social inventories of refined zinc ingots across Shanghai, Tianjin, Guangdong, Jiangsu, Zhejiang, Shandong and Hebei decreased further by 13,900 mt in the week ended September 30 to 129,500 mt, and are expected to shrink further as downstream users are likely to stockpile after the National Day holidays. Domestic treatment charges extended declines, suggesting a tight zinc concentrate supply. The most-traded SHFE 2011 zinc contract is expected to move between 19,200-19,700 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be seen at 80-120 yuan/mt against the October contract.

Nickel: Three-month LME nickel settled at $14,535/mt on October 7, up $65/mt or 0.45% from the closing price on September 30, and rose further to break above $14,700/mt in the afternoon of October 8. LME nickel stocks fell 318 mt or 0.13% from September 30 to 236,058 mt on October 7.

The most-active SHFE 2012 nickel contract closed 1.5% lower at 111,700 yuan/mt on September 30, and is likely to trade between 112,000-118,000 yuan/mt today.

In terms of fundamentals, nickel ore prices remained firm as its supply will still be tight after the Philippines enters a wet season in the fourth quarter. With support from raw material prices, NPI prices were also firm. Refined nickel inventories fell as trades turned active after its economics improved and as downstream users stockpiled ahead of the National Day holidays. Demand for primary nickel is expected to be strong in the near term as domestic stainless steel mills will maintain high production in October.

Lead: Three-month LME lead closed 0.92% weaker at $1,827/mt on Thursday.

Tin: Three-month LME tin rose 4.15% from pre-holiday levels to $18,175/mt as of 18:00 Beijing time on October 8, and pressure above will be seen from $18,300/mt today.

Market commentary Copper Aluminium Lead Tin Zinc Nickel

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.

For any inquiries or to learn more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

28 mins ago

Social Inventory Plunged, Shanghai Spot Copper Premiums Held Steady Amid Bargaining [SMM Shanghai Spot Copper]

[Shanghai Spot Copper] Looking ahead to tomorrow, the Shanghai spot copper market is expected to remain in a tug-of-war. Copper prices declined somewhat during the day, and downstream enterprises showed stronger restocking sentiment, but considering the heavy concentrated purchases already made last week, actual incremental buying was relatively limited. Inventory side, according to SMM, combined social inventory in Shanghai and Jiangsu fell by about 41,600 mt, showing a sharp destocking trend. During the day, supplier quotations were steady at first and then declined, with suppliers actively selling as premiums rebounded, and the sell-off put pressure on spot prices. In addition, some suppliers had already quoted against the SHFE copper 2604 contract using cargoes with invoices dated next month during the day, indirectly reflecting moderate sales volume within the month and strong willingness to sell among suppliers. Overall, amid the tug-of-war between faster destocking and supplier sell-offs, Shanghai spot copper premiums are expected to remain at the current level tomorrow.

28 mins ago

1 hour ago

China's Copper Foil Customs Data by Trade Mode

[Copper Foil Customs Data] According to data from the General Administration of Customs, China imported 4,877.05 mt of copper foil through Ordinary Trade in January 2026; 400.7 mt through processing trade with supplied materials; 861.73 mt through processing trade with imported materials; and 994.24 mt through other trade modes. The figures for February were 4,604.8 mt, 257.71 mt, 735.3 mt, and 844.91 mt, respectively. In January 2026, China exported 1,192.52 mt of copper foil through Ordinary Trade; 1,450.02 mt through processing trade with supplied materials; 3,369.14 mt through processing trade with imported materials; and 124.37 mt through other trade modes. The figures for February were 1,408.74 mt, 1,470.77 mt, 1,736.49 mt, and 204.49 mt, respectively.

1 hour ago

The China's Copper Foil trade deficit in January-February 2026 less than 2025

[Copper Foil Customs Data] According to data from the General Administration of Customs, China’s copper foil import value was $134.53 million in January 2026, up 25.42% YoY and down 0.02% MoM; in February, China’s copper foil import value was $132.92 million, up 27.19% YoY and down 1.20% MoM. China’s copper foil export value was $90.40 million in January 2026, up 126.64% YoY and up 18.23% MoM; in February, China’s copper foil export value was $73.91 million, up 98.06% YoY and down 18.24% MoM. In January 2026, China’s copper foil trade deficit stood at about $44.13 million, and in February the trade deficit was about $59.01 million. The trade deficit totaled $103.14 million in January-February 2026, about $31.43 million less than $134.57 million in January-February 2025.

1 hour ago