SMM Evening Comments (Nov 16): Shanghai nonferrous metals rose broadly on the signing of RECP and positive Chinese economic data

SHANGHAI, Nov 16 (SMM) — SHFE nonferrous metals were mostly higher on Monday November 16 on the signing of the Regional Comprehensive Economic Partnership (RECP) over the weekend and upbeat Chinese economic data released today.

China's factory output rose faster-than-expected in October and retail sales continued to recover, as the world's second-largest economy continues to bounce back from the COVID-19 slump.

Industrial output climbed 6.9 percent in October from a year earlier, data from the National Statistics Bureau showed on Monday, in line with September's gain.

Retail sales climbed 4.3 percent year on year in October, reaching 3.86 billion yuan. The growth picked up from the 3.3-percent gain in September.

On the SHFE, copper, the best performer today, surged 3.15%, Zinc rose 1.63%, nickel strengthened 0.94% and tin advanced 1.97%, while aluminium slid 0.32% and lead fell 0.41%.

SMM data showed that social inventories of refined zinc ingots across Shanghai, Tianjin, Guangdong, Jiangsu, Zhejiang, Shandong and Hebei decreased 1,600 mt from last Friday November 13 to 166,100 mt as of Monday November 16. The stocks were down 3,600 mt from November 9.

Copper: The most-active SHFE 2012 copper contract soared 3.15% to close the day at 53,640 yuan/mt, with trading volume increasing 102,000 lots to 191,000 lots. China and 14 other Asia-Pacific countries signed the world’s largest trade agreement, the Regional Comprehensive Economic Partnership or RCEP, over the weekend.The signing cemented the Regional Comprehensive Economic Partnership (RCEP) as the largest trading bloc globally, covering a market of 2.2 billion people and $26.2 trillion of global output. That accounts for about 30% of the population worldwide, as well as the global economy. It is also larger than what’s covered under the United States-Mexico-Canada Agreement (USMCA) and the European Union. In addition, the US dollar index fell back to 92.5, which also underpinned copper prices.

Aluminium: The most-liquid SHFE 2012 aluminium contract declined 0.32% on the day to end at 15,390 yuan/mt, with trading volume rising 13,032 lots to 153,000 lots. Cargoes flowing into the spot market after the delivery and arrivals of seaborne cargoes may likely to pressure aluminium prices in the short term  

Zinc: The most-traded SHFE 2012 zinc contract closed the day 1.63% higher at 20,280 yuan/mt, with open interest falling 2,065 lots to 80,844 lots. The signing of the Regional Comprehensive Economic Partnership (RECP) over the weekend increased market sentiment, and this, combined with positive Chinese economic data, boosted zinc prices. The contract is expected to remain at high levels tonight, breaking above all moving averages again.

Nickel: The most-active SHFE 2102 nickel contract climbed 0.94% to end the day at 120,240 yuan/mt, with trading volume of 743,880 lots and open interest rising 13,093 lots to 151,593 lots.

Lead: The most-traded SHFE 2012 lead contract finished the day 0.41% lower at 14,675 yuan/mt, with trading volume rising 9,701 lots to 43,479 lots. China released its added value of industries above designated size for October, fixed assets investment and total retail sales of consumer goods today, which suggested a stable recovery in its economy.  

Tin: The most-active SHFE 2101 tin contract rose 1.97% to end the day at 148,870 yuan/mt, after hitting a more than two-month high at 148,970 yuan/mt earlier in the session, with open interest increasing 3,632 lots to 35,905 lots. Whether the contract could break through the 150,000 yuan/mt mark tonight will be monitored.