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SMM Evening Comments (Oct 14): Shanghai nonferrous metals ended mixed
Oct 14, 2020 17:30CST
Source:SMM
SHFE nonferrous metals closed mixed on Wednesday October 14 as investors monitored a speech from Chinese President Xi Jinping.

SHANGHAI, Oct 14 (SMM) – SHFE nonferrous metals closed mixed on Wednesday October 14 as investors monitored a speech from Chinese President Xi Jinping.

 

Chinese President Xi Jinping spoke Wednesday at an event commemorating the 40th anniversary of the establishment of the Shenzhen special economic zone in the southern province of Guangdong.

 

In remarks that lasted nearly one hour, Xi made broad statements reiterating China's commitment to improving the business environment and opening further to foreign enterprises, while indicating how Hong Kong might be integrated more into the mainland.

 

Aluminium, the best performer, rose 0.27%, nickel advanced 0.03% and copper climbed 0.06%, while zinc edged down 1.24%, lead weakened 2.09% and tin shed 0.48%.

 

Social inventories of long steel (including wire rods and rebar) in Guangzhou decreased 2.31% or 32,100 mt in the week ended October 14 to 1.36 million mt, showed SMM data. Stocks were 66.8% higher than the same period last year.

 

The ferrous complex fell across the board. Iron ore decreased 2.38%, rebar slipped 0.28%, and hot-rolled coil lost 0.71%.

 

Copper: The most-traded SHFE 2011 copper contract finished the day 0.06% higher at 51,540 yuan/mt. China's imports of unwrought copper and copper semis remained high in September, increasing by 60% year on year, of which refined copper is expected to be nearly 500,000 mt, but there is no obvious increase in domestic inventories. The expected recovery of domestic consumption supports copper prices. In addition, the management of Escindida copper mine in Chile extended the salary negotiation for another day, and recent labor-management negotiations in many mines in Chile have aroused concerns on the supply side, supporting copper prices. US Producer Price Index in September and whether the contract could maintain its upward trend will come under scrutiny tonight.

 

Aluminium: The most-liquid SHFE 2011 aluminium contract climbed to an intraday high of 14,750 yuan/mt and closed up 0.27% at 14,650 yuan/mt. Open interest rose 4,243 lots to 126,079 lots. Funds flowed in for the fourth consecutive day. Inventories and macro changes will be monitored. China's primary aluminium output rose 7.68% year on year to 3.11 million mt in September (30 production days), showed an SMM survey.

 

Zinc: The most-active SHFE 2011 zinc contract finished the day 1.24% lower at 19,120 yuan/mt. Open interest rose 1,828 lots to 87,817 lots. The contract fell for two consecutive day. Domestic supply of zinc ingots continues to increase, while the revaluation of the RMB keeps the import window open. The potential import inflow risk increases the supply pressure, and the short-term fundamentals are not optimistic. Before the contradiction at the mine end becomes clear, the contract is expected to fluctuate weakly.

 

Nickel: The most-traded SHFE 2012 nickel contract ended the day 0.03% higher at 117,030 yuan/mt today. Open interest rose 1,568 lots to 110,514 lots.

 

Lead: The most-traded SHFE 2011 lead contract slid to an intraday low of 14,475 yuan/mt, before regaining some ground to finish the day 2.09% lower at 14,515 yuan/mt. Open interest rose 1,755 lots to 25,513 lots. Fundamental primary lead refineries shipped at high prices, and most of them are converted into premium, and primary lead cost support lead prices. The contract is likely to stop falling and will test support from 14,500 yuan/mt tonight.

 

Tin: The most-liquid SHFE 2012 tin contract closed down 0.48% at 146,010 yuan/mt today. Open interest rose 349 lots to 27,817 lots. Pressure below is expected to around 145,000 yuan/mt.

 

Evening comments
Copper
Aluminium
Zinc
Nickel
Lead
Tin

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