SHANGHAI, Oct 12 (SMM) — Shanghai base metals were mostly higher on Monday morning, while their counterparts on the LME fell for the most part.
Shanghai base metals rose for the most part on Friday night. Copper inched up 0.02%, aluminium added 0.59%, nickel advanced 0.67% and tin edged up 0.1%, while zinc weakened 0.57% and lead fell 0.6%.
The LME complex rose across the board on Friday. Nickel surged 3.58% to lead the gains, copper increased 1.54%, aluminium climbed 2.67%, zinc added 1.8%, lead advanced 1.48% and tin strengthened 0.55%.
Copper: Three-month LME copper settled 1.54% higher at $6,772/mt on Friday, after hitting its highest in more than two weeks at $6,781/mt earlier in the session. It is likely to move between $6,690-6,770/mt today.
The most-active SHFE 2011 copper contract slid to an intraday low of 50,820 yuan/mt before reversing some losses to close 0.02% higher at 51,440 yuan/mt on Friday night. It is expected to trade between 50,900-51,500 yuan/mt today, while spot premiums will be seen at 70-150 yuan/mt.
The US dollar index, which tracks the greenback against a basket of its peers, fell to its lowest in nearly three weeks on Friday as the Trump administration resumed negotiations with the Congress on economic stimulus, which boosted copper futures. The world's largest copper mine, Escondida, rejected BHP's proposed new labor agreement on Friday. Worries about potential strikes also underpinned copper prices.
Aluminium: Three-month LME aluminium climbed to a one-year high of $1,855.5/mt on Friday, before relinquishing some gains to end 2.67% higher at $1,847/mt. It is expected to move between $1,820-1,860/mt today.
The most-liquid SHFE 2011 aluminium contract settled 0.59% higher at 14,485 yuan/mt on Friday night, and is likely to trade between 14,300-14,700 yuan/mt today.
Nickel: The most-active SHFE 2012 nickel contract increased 0.67% to end at 116,260 yuan/mt on Friday night.
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. NPI prices were also firm with support from raw material prices. 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.
Zinc: Three-month LME zinc rose to a three-week high of $2,448/mt on Friday, before giving up some gains to close 1.8% firmer at $2,427/mt. Zinc stocks across LME-listed warehouses shrank 350 mt, or 0.16%, to 217,625 mt. Optimism over a new round of US stimulus boosted market sentiment, and some countries extended restrictions as Covid-19 continues to spread, triggering concerns on tight supply of zinc concentrate. These boosted zinc prices. LME zinc is expected to move between $2,390-2,440/mt today.
The most-traded SHFE 2011 zinc contract settled 0.57% lower at 19,135 yuan/mt in choppy trading on Friday night. Smaller-than-expected profits and tight zinc concentrate supply deterred zinc smelters from stepping up production, which provided traction to zinc prices. The November contract is likely to trade between 19,000-19,500 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be seen at 150-170 yuan/mt against the October contract.
Lead: Three-month LME lead climbed to a one-week high of $1,819/mt in the morning of Asian trading hours on last Friday, but later fell to an intraday low of $1,782.5/mt before wiping out all earlier losses to close 1.48% higher at $1,819/mt.
The most-active SHFE 2011 lead contract weakened 0.6% to settle at 14,790 yuan/mt on Friday night, and is expected to fluctuate range-bound in the near term as downstream demand failed to improve.
Tin: Three-month LME tin ended 0.55% higher at $18,235/mt on Friday, after hitting its highest in more than two weeks at $18,280/mt earlier in the session. Pressure above will be seen at $18,500/mt today.
The most-liquid SHFE 2011 tin contract edged up 0.1% to settle at 147,480 yuan/mt on Friday night. Pressure above will be seen from around 148,500 yuan/mt today.