SMM Evening Comments (Nov 17): Shanghai nonferrous metals were mostly lower as longs left with profits

SHANGHAI, Nov 17 (SMM) – SHFE nonferrous metals, except for zinc and tin, cruised lower on Tuesday November 17.  

Copper slid 0.43%, aluminium shed 0.52%, lead weakened 0.61% and nickel plunged 3.06%, while zinc added 0.97% and tin rose 0.94%.

SMM data showed that a total of 91 vessels carrying 13.35 million mt of iron ore arrived at major Chinese ports during November 8-14, SMM estimates. This was down 980,000 mt from the previous week, but up 1.8 million mt from the same period last year. While arrivals in Tangshan increased 1.15 million on the week, there was a drop of 1.4 million mt in the amount of iron ore arriving in Shandong.

Copper: The most-traded SHFE copper contract switched to the 2101 contract today which closed the day 0.43% lower at 52,910 yuan/mt, with trading volume decreasing 71,000 lots to 120,000 lots. Market mood was improved after news came that a coronavirus vaccine developed by Moderna is 94.5% effective in preventing the virus, and the World Health Organisation (WHO) projected that there will be more “vaccine candidates” coming out at the end of 2020 or the start of 2021. However, investors remained cautious as COVID-19 cases continued to register new single-day highs in the Europe and US. SMM will keep an eye on US economic data set for release tonight.

Aluminium: The most-liquid SHFE 2012 aluminium contract fell 0.52% to end the day at 15,390 yuan/mt, with open interest falling 3,580 lots to 151,000 lots. Support below may be seen between 15,000-15,200 yuan/mt tonight.

Zinc: The most-active SHFE 2012 zinc contract finished the day 0.97% higher at 20,355 yuan/mt, with open interest decreasing 3,700 lots to 77,144 lots. Tightened zinc concentrate supply raised expectations of year-end maintenance at smelters, providing traction to zinc prices, but this may further weigh on the already weakened consumption.   

Nickel: The most-traded SHFE 2102 nickel contract slumped 3.06% to end the day at 116,100 yuan/mt, with open interest rising 8,148 lots to 159,741 lots. Stainless steel inventories have built up for several straight weeks amid high production at mills and limited downstream consumption, which narrowed profits of steel makers, prompting them to depress raw materials prices.  

Lead: The most-active SHFE 2101 lead contract slid 0.61% to close the day at 14,605 yuan/mt, with trading volume shrinking 4,088 lots to 15,190 lots. Tepid consumption may likely to continue to weigh on lead prices. Whether the contract would fall below the 40-day moving average of 14,580 yuan/mt tonight will be monitored.

Tin: The most-liquid SHFE 2101 tin contract finished the day 0.94% higher at 148,500 yuan/mt, after hitting its highest since July at 150,450 yuan/mt earlier in the session, with open interest rising 2,010 lots to 37,915 lots. It is expected to move between 146,500-152,000 yuan/mt tonight.