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SMM Morning Comments (Nov 24): Shanghai base metals fell across the board as the dollar extended gains
Nov 24,2020 09:46CST
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Source:SMM
Nonferrous metals on both SHFE and LME declined across the board in early trading of Tuesday as the dollar index was last up 0.2% at 92.60, after earlier dropping to 92.013, the lowest since September 1.

SHANGHAI, Nov 24 (SMM) — Nonferrous metals on both SHFE and LME declined across the board in early trading of Tuesday as the dollar index was last up 0.2% at 92.60, after earlier dropping to 92.013, the lowest since September 1.

Shanghai base metals fell across the board in overnight trading. Copper fell 0.46%, aluminium declined 0.57%, zinc shed 2.08%, tin weakened 0.42%, lead slid 0.62% and nickel edged down 0.06%.

The LME complex fell across the board on Wednesday. Zinc plunged 2.43% to lead the losses, copper fell 0.72%, aluminium weakened 0.98%, tin slid 0.67%, lead edged down 1.38% and nickel slipped 0.5%.

Copper: Three-month LME copper fell 0.72% to end at $7,209/mt on Monday, and is likely to trade between $7,160-7,240/mt today.

The most-active SHFE 2101 copper contract went down 0.24% to close at 53,840 yuan/mt in overnight trading, and it is expected to move between 53,600-54,100 yuan/mt today, while spot premiums will be seen at 120-180 yuan/mt.

The US Markit PMI released at night recorded 57.9, the fastest growth level in recent five years. After the data was released, the US dollar index soared, hitting 92.804 in intraday trading, setting a new high in the past week. Due to the strong US dollar index, copper futures were under obvious pressure and pulled back at night. However, boosted by the good news of vaccines and optimistic market expectations, copper futures remained at a high level in recent years, with a limited decline at night. On the spot side, stocks declined sharply, which gave certain support to the premium and discount to a certain extent. It is expected that the premium callback is limited in the near term.

Aluminium: Three-month LME aluminium fell 0.98% to close at $1,967.5/mt on Monday, with open interest rising to 726,000 lots. It is expected to trade between $1,950-2,000/mt today. 

The most-liquid SHFE 2012 aluminium contract went down 0.44% to settle at 15,795 yuan/mt on Friday night, and is likely to trade between 15,600-16,000 yuan/mt today.

Zinc: Three-month LME zinc fell 2.43% to close at $2,732/mt on Monday. Zinc stocks at LME-listed warehouses rose 300 mt to 222,975 mt. Overnight, the US dollar strengthened, and the number of pneumonia cases in COVID-19 continued to increase all over the world, which limited the optimism of vaccine breakthrough. However, the strong manufacturing PMI data of IHS Markit in the US showed that the economic growth momentum of the US accelerated, and it is expected that there will be no bad news in the near term, and LME zinc will keep fluctuating strongly. The contract is likely to trade between $2,770-2,820/mt today.

The most-liquid SHFE 2101 zinc contract fell 2.13% to end at 20,690 yuan/mt in overnight trading. The weak LME zinc at night dragged down the trend of SHFE zinc. On the fundamentals, under the background of high zinc prices and seasonal weakening, domestic inventories continued to increase and the consumption support was insufficient. However, the TC continued to decrease and the ore end support still existed. The SHFE zinc contract is expected to move between 20,600-21,100 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be seen higher at 130-140 yuan/mt.

Nickel: The most-active SHFE 2102 nickel contract fell 0.06% to close at 118,930 yuan/mt on Monday. Open interests fell 487 lots to 151,000 lots. The consolidation of SHFE Nickel between the middle rail position of boll line and 120,000 yuan/mt will be monitored today.

Lead: Three-month LME lead settled 1.38% lower at $2,002/mt on Monday. The impact of the increase of COVID-19 infection cases in overseas economies and the effect of new vaccination on the prices of basic metals in the future will be monitored.

The most-active SHFE 2101 lead contract trended lower on Monday night, ending 0.62% lower at 15,320 yuan/mt. The contract is expected to keep fluctuating at high in the near term.

Tin: Three-month LME tin closed down 0.67% at $18,600/mt on Monday. The US dollar rebounded slightly, as the data showed that the activity of US enterprises expanded at the fastest speed in more than five years in November, and before that, the US dollar index hit strong technical support. LME tin is expected to keep fluctuating in the near term, and the guidance of the US dollar will be monitored. Pressure above will be seen from $188,000 /mt today. Support below will be seen from $185,000/mt today.

The most-liquid SHFE 2101 tin contract fell 0.59% at 146,980 yuan/mt on Monday night. The contract is expected to keep fluctuating in the near term. Pressure above will be seen from 147,500 yuan/mt today. Support below will be seen from 145,500 yuan/mt today.

Market commentary
Copper
Aluminium
Zinc
Nickel
Lead
Tin

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