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SMM Morning Comments (Oct 23): Shanghai base metals were mostly lower on dollar bounce-back, stimulus concerns
Oct 23,2020 10:06CST
price review forecast
Source:SMM
Shanghai base metals fell for the most part on Friday morning, while their counterparts on the LME set for a mixed start, as the US dollar rebounded and hopes for a US stimulus package before the Nov. election dimmed.

SHANGHAI, Oct 23 (SMM) — Shanghai base metals fell for the most part on Friday morning, while their counterparts on the LME set for a mixed start, as the US dollar rebounded and hopes for a US stimulus package before the Nov. election dimmed.

 

Shanghai base metals mostly closed in negative territory in overnight trading. Zinc, the best performer, rose 0.15%, while copper slid 0.46%, aluminium weakened 0.24%, lead dipped 0.1%, nickel slid 0.44%, and tin slipped 0.77%.

The LME complex fell for the most part on Thursday. Aluminium and zinc both ended flat, while copper shed 1.24%, lead weakened 0.36%, nickel shed 0.72% and tin fell 0.4%.

 

Copper: Three-month LME copper fell 1.24% to close at $6,909/mt on Thursday, and is expected to trade between $6,860-6,940/mt today.

The most-active SHFE 2012 copper contract shed 0.46% to end at 52,200 yuan/mt in overnight trading. It is likely to move between 51,700-52,200 yuan/mt today, while spot premiums will be seen at 30-100 yuan/mt.

The US dollar index, which tracks the greenback against a basket of leading currencies, rebounded overnight, returning above 93, which pressured copper futures. US initial claims for unemployment benefits fell to 787,000 in the week ended October 17, reported Labour Department, suggesting a recovery in the labour market, but it remained far higher than the pre-pandemic level. The US Democrats and Republicans have yet to come to an agreement on the stimulus package and talks will continue today. Soaring COVID-19 cases in the US and Europe posts new challenges for economies.  

 

Aluminium: Three-month LME aluminium ended flat at $1,848/mt on Thursday. Shrinking LME aluminium stocks underpinned prices. It is likely to trade between $1,830-1,870/mt today.

The most-liquid SHFE 2011 aluminium contract moved 0.24% lower to settle at 14,725 yuan/mt in overnight trading, and is expected to trade between 14,500-14,900 yuan/mt today.

 

Zinc: Three-month LME zinc closed flat at $2,565/mt on Thursday, after hitting its highest since May 2019 at $2,587/mt earlier in the session. LME zinc stocks shrank 200 mt or 0.09% to 219, 575 mt. Better-than-expected US jobless data boosted market sentiment, but the US dollar cruised higher and whether the fiscal stimulus package could come out before the Nov. 3 presidential election remained uncertain. LME zinc is expected to trade between $2,540-2,590/mt today.

The most-liquid SHFE 2012 zinc contract closed 0.15% higher at 19,740 yuan/mt in overnight trading. Soaring COVID-19 cases overseas stocked worries about zinc concentrate supply, while in the domestic spot market trades were quiet as high zinc prices kept downstream buyers on the sidelines. The December contract is likely to fluctuate between 19,500-20,000 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be seen slightly lower at 130-140 yuan/mt against the November contract.

 

Nickel: The most-active SHFE 2012 nickel contract fluctuated range-bound in overnight trading, ending 0.44% lower at 119,830 yuan/mt.

 

Lead: Three-month LME lead dropped 0.36% to settle at $1,794.5/mt on Thursday, snapping its three-day winning streak.

The most-traded SHFE 2012 lead contract edged down 0.1% to close at 14,400 yuan/mt in overnight trading.  

 

Tin: Three-month LME tin weakened 0.4% to end at $18,635/mt on Thursday as the US dollar ticked higher. It is expected to move between $18,400-19,00/mt today, remaining at highs.

The most-liquid SHFE 2012 tin contract fell 0.77% to close at 146,040 yuan/mt in overnight trading. Tepid consumption pressured tin prices. The December contract is likely to trade between 145,000-148,500 yuan/mt today.

Market commentary
Copper
Aluminium
Zinc
Nickel
Lead
Tin

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