SMM Evening Comments (Nov 23): Shanghai nonferrous metals closed mostly higher, tin fell 0.01%

SHANGHAI, Nov 23 (SMM) – SHFE nonferrous metals rose for the most part on Monday November 23 as investors continued to watch for coronavirus developments.

Nickel, the best performer, rose 2.37%, aluminium advanced 0.32%, zinc climbed 0.24%, lead went up 1.51% and copper gained 1.68%, while tin edged down 0.01%.

SMM data showed that social inventories of refined zinc ingots across Shanghai, Tianjin, Guangdong, Jiangsu, Zhejiang, Shandong and Hebei increased 1,000 mt from last Friday November 20 to 176,100 mt as of Monday November 23. The stocks were up 10,000 mt from last Monday November 16.

The ferrous complex fell across the board. Iron ore decreased 1.2%, rebar fell 1.11%, and hot-rolled coil went down 1.59%.

Copper: The most-traded SHFE 2101 copper contract finished the day 1.68% higher at 53,970 yuan/mt. Open interest rose 8,577 lots to 147,408 lots. Pfizer took the lead in applying to FDA for emergency use authorization of COVID-19 vaccine, and the person in charge of the vaccine speed project said that he hoped to start vaccination in less than three weeks. Even if the pandemic continues to ferment in Europe, America and other countries, the good news of vaccines dilutes the pessimism that pandemics continue to spread to some extent, and the uncertain factors continue to decrease, providing some momentum for copper prices. On fundamentals, domestic inventories continued to decline. SMM data showed that social inventories decreased 23,800 mt to 218,700 mt last Wednesday, and social inventories have declined for six consecutive weeks. In addition, SHFE inventories decreased 21,183 mt month on month, and the inventories continuously dropped to a low level below 100,000 mt. Inventories continued to decline, which brought obvious support to copper prices. The guidance provided by LME copper and IHS Markit US Manufacturing PMI for November will come under scrutiny tonight.

Aluminium: The most-liquid SHFE 2012 aluminium contract finished the day 0.32% higher at 15,865 yuan/mt. Open interest fell 7,263 lots to 133,129 lots.

Zinc: The most-active SHFE 2012 zinc contract closed up 0.24% at 21,070 yuan/mt. Open interest fell 10,884 lots to 59,915 lots.

Nickel: The most-traded SHFE 2102 nickel contract ended the day 2.37% lower at 119,780 yuan/mt today. Open interest rose 4,644 lots to 151,399 lots. SHFE nickel is expected to trade between 115,000-120,000 yuan/mt this week. Whether the contract could remain above 120,000 yuan/mt will be monitored.

Lead: The most-traded SHFE 2101 lead contract fell to an intraday low of 15,085 yuan/mt in afternoon trading and ended the day 1.51% higher at 15,155 yuan/mt. Open interest rose 3,991 lots to 35,189 lots. The negative expectations of lead supply caused by environmental protection and limited production in North China and prices of battery scrap provided certain support for lead prices. The contract is likely to keep fluctuating at high in the near term. The contract is expected to continue to test support from 15,100 yuan/mt tonight.

Tin: The most-liquid SHFE 2101 tin contract climbed to a session high of 147,200 yuan/mt and finished the day 0.06% higher at 146,840 yuan/mt today. Open interest fell 131 lots to 33,657 lots. The contract traded between 10-day moving average and 20-day moving average today. The contract is expected to keep fluctuating in the near term. Pressure above is expected to around 148,000 yuan/mt. Support below is expected to around 145,000 yuan/mt.