SMM Evening Comments (Nov 26): Nonferrous metals on the SHFE mostly advanced, copper rose 1.06%

SHANGHAI, Nov 26 (SMM) – SHFE nonferrous metals rose for the most part on Thursday November 26. Copper rose 1.06%, aluminium added 0.22%, zinc advanced 0.86%, nickel inched up 0.19% and tin climbed 0.38%, while lead underperformed with a 0.16% loss.

SMM data showed that stocks of 6063 aluminium billet across the five major consumption areas – Foshan, Wuxi, Huzhou, Changzhou and Nanchang – in China shrank 6,400 mt from the prior week to 69,000 mt as of November 26. Stocks fell sharply by 9,600 mt in Foshan, held largely unchanged in Huzhou, and rose in Changzhou and Nanchang.

Social inventories of primary aluminium across eight consumption areas in China, including SHFE warrants, declined 19,000 mt from the prior week to 596,000 mt as of November 26.

Copper: The most-traded SHFE 2101 copper contract finished the day 1.06% higher at 55,310 yuan/mt, with open interest rising 9,123 lots to 166,000 lots. US initial claims for jobless benefits stood at 778,000 in the week ended November 21, rising for two consecutive weeks, which may suggest a new round of layoffs. Moreover, US personal income fell more than expected in October, and trade deficit expanded. However, US durable goods orders grew faster than expected in October, and sales of new houses remained at high levels. Positive COVID-19 vaccine news and a weaker dollar which fell below 92 to around 91.9 underpinned copper prices. Whether the contract could rise further tonight will be monitored.

Aluminium: The most-traded SHFE 2012 aluminium contract climbed 0.22% to end the day at 16,005 yuan/mt, with open interest shrinking 19,263 lots to 90,067 lots.  

Zinc: The most-liquid SHFE 2101 zinc contract closed the day 0.86% higher at 21,045 yuan/mt, with open interest increasing 5,119 lots to 107,000 lots. Falling treatment charges squeezed margins at zinc smelters, while consumption has not slid more than expected yet. The contract is likely to fluctuate around 21,000 yuan/mt tonight.  

Nickel: The most-active SHFE 2102 nickel contract inched up 0.19% on the day to close at 120,750 yuan/mt. Support below will be seen from 118,500 yuan/mt tonight.

Lead: The most-traded SHFE 2101 lead contract slid 0.16% to end the day at 15,260 yuan/mt, with trading volume rising 2,295 lots to 50,392 lots. Tepid downstream consumption, environmental restrictions in north China and firm battery scrap prices are likely to keep SHFE lead in range-bound in the near term. The contract may continue to test the support from the five-day moving average tonight.

Tin: The most-liquid SHFE 2101 tin contract finished the day 0.38% higher at 146,410 yuan/mt in choppy trading, with open interest dropping sharply by 6,975 lots to 15,187 lots. It is expected to move between 145,000-147,500 yuan/mt tonight.