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SMM Morning Comments (Oct 22): Shanghai base metals broadly rose with US stimulus talks in focus
Oct 22,2020 10:12CST
price review forecast
Source:SMM
Shanghai base metals rose for the most part on Thursday morning, holding onto overnight gains, while their counterparts on the LME broadly weakened, as investors track the latest developments in US stimulus talks.

SHANGHAI, Oct 22 (SMM) — Shanghai base metals rose for the most part on Thursday morning, holding onto overnight gains, while their counterparts on the LME broadly weakened, as investors track the latest developments in US stimulus talks.

 

Shanghai base metals, except for nickel and tin, closed higher in overnight trading. Copper added 0.69%, aluminium advanced 0.48%, zinc strengthened 0.66% and tin climbed 0.59%, while nickel declined 1.21%, and tin closed flat.

The LME complex mostly advanced on Wednesday. Copper rose 1.31%, aluminium added 0.46%, zinc firmed 0.87%, lead climbed 1.24% and tin strengthened 0.48%, while nickel underperformed with a 0.87% loss.

 

Copper: Three-month LME copper rose 1.31% to close at $6,996/mt on Thursday, after hitting its highest in more than two years at $7,034/mt earlier in the session. It is expected to trade between $6,920-7,000/mt today.

The most-active SHFE 2011 copper contract strengthened 0.69% to end at 52,410 yuan/mt in overnight trading. It is likely to move between 52,200-52,700 yuan/mt today, while spot premiums will be seen higher at 80-120 yuan/mt.

The US dollar fell below 93 overnight, hitting a seven-week low, as optimism over a large US fiscal stimulus package prompted some investors to step up bets on riskier currencies. Chile’s Candelaria copper mine has suspended operation since October 20 and demonstrations continued, which remained supportive to copper prices.  

 

Aluminium: Three-month LME aluminium settled 0.46% firmer at $1,848/mt on Wednesday, and is expected to trade between $1,830-1,870/mt today.

The most-active SHFE 2011 aluminium contract advanced 0.48% to close at 14,790 yuan/mt in overnight trading, and is likely to move between 14,600-15,000 yuan/mt today.

 

Zinc: Three-month LME zinc ended 0.87% higher at $2,565/mt on Wednesday, after hitting its highest in nearly two months at $2,580/mt earlier in the session. LME zinc stocks shrank 550 mt or 0.25% to 219,775 mt. The US dollar dropped to a seven-week low against a basket of its peers on Wednesday after the White House and House Speaker Nancy Pelosi boosted hopes for a large fiscal stimulus package. LME zinc is likely to fluctuate between $2,540-2,590/mt today.

The most-traded SHFE 2011 zinc contract strengthened 0.66% to settle at 19,835 yuan/mt in overnight trading, after hitting a one-month high at 19,925 yuan/mt earlier in the session. Two zinc smelters have started to cut output in Q4 due to shortage of zinc concentrate, as SMM learned, which boosted zinc prices. The November contract is likely to move between 19,500-20,000 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be seen lower at 130-150 yuan/mt.

 

Nickel: The most-active SHFE 2012 nickel contract fell 1.21% to close at 120,050 yuan/mt in overnight trading as longs left the market with profits. Support from the 120,000 yuan/mt mark will be monitored today.

 

Lead: Three-month LME lead rose 1.24% to settle at $1,801/mt on Wednesday.

The most-liquid SHFE 2011 lead contract advanced 0.59% to end at 14,495 yuan/mt in overnight trading.

 

Tin: Three-month LME tin added 0.48% to close at $18,700/mt on Wednesday as the US dollar extended declines, and as shrinking LME tin stocks stoked worries about tin supply. LME tin is expected to trade between $18,300-19,000/mt today.

The most-liquid SHFE 2012 tin contract ended flat at 147,660 yuan/mt in overnight trading, and is likely to move between 146,500-148,500 yuan/mt today.

Market commentary
Copper
Aluminium
Zinc
Nickel
Tin
Lead

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