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SMM Morning Comments (Nov 13): Shanghai base metals were mostly higher due to optimism from positive vaccine news earlier in the week
Nov 13, 2020 09:31CST
Source:SMM
Nonferrous metals on the SHFE were mostly higher on Friday morning, and their counterparts on the LME also rose for the most part.

SHANGHAI, Nov 13 (SMM) — Nonferrous metals on the SHFE were mostly higher on Friday morning, and their counterparts on the LME also rose for the most part.

Shanghai base metals mostly advanced in overnight trading. Copper added 0.37%, aluminium rose 1.05%, lead climbed 1.17% and nickel strengthened 0.67%, while zinc weakened 0.2% and tin fell 0.21%.

The LME complex also rose for the most part. Lead climbed 0.91% to lead the gains, copper advanced 0.44%, aluminium added 0.55% and tin edged up 0.03%, while nickel and zinc underperformed with 0.63% and 0.15% losses respectively.

Copper: Three-month LME copper rose 0.44% to end at $6,916/mt on Thursday, and is likely to trade between $6,890-6,960/mt today.

The most-active SHFE 2012 copper contract climbed 0.27% to close at 51,940 yuan/mt in overnight trading, and it is expected to move between 51,700-52,200 yuan/mt today, while spot premiums will be seen at 120-190 yuan/mt.

The latest US weekly jobless claims as of November 7 recorded 709,000, the lowest since the week of March 14, and the decline was the largest in five weeks, indicating that the labor market continued to improve. Boosted by this news, the US dollar index showed a brief correction at night, while copper futures rose slightly at night. However, macro uncertainties still exist, and Federal Reserve Chairman Powell predicted that the economy will face challenges in the coming months. Yesterday, the number of new cases of COVID-19 in the US exceeded 150,000, and the death toll reached the new level since May. The market is worried about the impact of stricter pandemic prevention and blockade measures on economic recovery, and the Trump administration will withdraw from the stimulus bill negotiations. Macro-caution has suppressed the continuous rise of copper futures. On the spot side, the market continues to be dominated by traders without downstream stimulating consumption. Close to delivery, the price difference structure on the delivery date and whether the inventory data can affect the premium structure will be monitored.

Zinc: Three-month LME zinc fell 0.15% to close at $2,624/mt on Thursday. Zinc stocks at LME-listed warehouses decreased 550 mt to 221,075 mt. Overnight, the optimism aroused by the good news of COVID-19 vaccine gradually faded, and the number of new COVID-19 cases in the US continuously exceeded 100,000 in a single day, which made investors worry that the economic recovery might be dragged down, the economic prospects of the US remained uncertain, and the market sentiment was cautious. Pandemic fermentation will be monitored in the near term. It is likely to trade between $2,600-2,650/mt today.

The most-liquid SHFE 2012 zinc contract weakened 0.2% to end at 19,950 yuan/mt in overnight trading. The supply of domestic zinc concentrate is tight, but it has not been transmitted to smelters. Acceptable profit of smelters and the impulse requirements at the end of the year lead to high operating rates. The support of zinc prices at the smelting end is insufficient. The December zinc contract is expected to move between 19,800-20,300 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be seen higher at 170-180 yuan/mt.

Nickel: The most-active SHFE 2102 nickel contract rose 0.67% to close at 119,530 yuan/mt on Thursday. Open interests rose 7,184 lots to 144,000 lots. The contract will test pressure from 120,000 yuan/mt today.

Lead: Three-month LME lead settled 0.91% higher at $1,885.5/mt on Thursday. LME lead rose for the third consecutive day. Global confidence in pandemic prevention and control on the market will come under scrutiny.

The most-active SHFE 2012 lead contract trended higher on Thursday night, ending 1.17% higher at 14,745 yuan/mt. It is expected to continue to fluctuate in the near term.

Tin: Three-month LME tin closed down 0.03% at $18,240/mt on Thursday, after hitting an intraday high at $18,390/mt earlier in the session. The latest US weekly jobless claims report did not budge the dollar when it came out on Thursday morning. The report showed the pace of decline in claims had slowed to 709,000 compared with 757,000 the prior week and forecasts for 735,000 claims. The US dollar index fell slightly on Thursday, and the COVID-19 vaccine is unlikely to change the situation that the US and Europe will have a severe winter, thus keeping investors cautious. Support below will be seen from $18,000/mt today. Pressure above will be seen from $18,500/mt today.

The most-liquid SHFE 2101 tin contract closed up 0.05% at 145,550 yuan/mt on Thursday night. The contract was affected by the strong holding price and weak consumption of smelters in the spot market, thus fluctuated. Support below will be seen from 144,800 yuan/mt today. Pressure above will be seen from 147,000 yuan/mt today.

Market commentary
Copper
Aluminium
Zinc
Lead
Nickel
Tin

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