SMM Morning Comments (Dec 3): Shanghai base metals fell across the board as longs left with profits

Published: Dec 3, 2020 09:52
Nonferrous metals on the SHFE all moved lower on Thursday morning as longs left the market with profits, while their counterparts on the LME set for mixed start.

SHANGHAI, Dec 3 (SMM) — Nonferrous metals on the SHFE all moved lower on Thursday morning as longs left the market with profits, while their counterparts on the LME set for mixed start.

Shanghai base metals fell across the board in overnight trading. Copper slid 0.44%, aluminium declined 1.16%, zinc fell 1.55%, lead weakened 1.25%, nickel slipped 0.99% and tin edged down 0.19%.

The LME complex, except for aluminium, cruised lower on Wednesday. Copper weakened 0.32%, zinc slid 0.88%, lead dropped 0.82%, nickel declined 1.57% and tin edged down 0.11% while aluminium inched up 0.12%.

Copper: Three-month LME copper ended 0.32% lower at $7,675/mt on Wednesday, and is expected to trade between $7,630-7,710/mt today.

The most-active SHFE 2101 copper contract closed 0.44% weaker at 57,120 yuan/mt in overnight trading, with open interest decreasing 3,621 lots to 133,000 lots.

Data released by the ADP National Employment Report overnight showed US private payrolls rose by 307,000 jobs in November, lower than economists’ forecast for a 410,000 rise in new jobs. It was also the smallest monthly increase since May. On Capitol Hill, House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer issued a joint statement calling on Republicans to work with them on another round of Covid relief funding, using a bipartisan proposal from Senate moderates as a starting point. Optimistic market sentiment limited the downward room for copper futures prices.

Zinc: Three-month LME zinc settled 0.88% lower at $2,749.5/mt on Wednesday after hitting a more than one-week low of $2,772/mt earlier in the session. Zinc stocks across LME-listed warehouses shrank 225 mt or 0.1% to 220,275 mt. US private payrolls in November fell short of expectations, suggesting that non-farm employment data set for release on Friday may likely to decline. But expectations of a US stimulus bill and positive Covid vaccine news limited the decline in zinc prices. LME zinc is likely to trade between $2,730-2,780/mt today.

The most-traded SHFE 2101 zinc contract declined 1.55% to close at 20,930 yuan/mt in overnight trading, with open interest falling 5,312 lots to 88,781 lots. It is expected to move between 20,700-21,200 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be seen at 130-140 yuan/mt against the January contract.

Nickel: The most-active SHFE 2102 nickel contract fell to a more than one-week low of 117,480 yuan/mt after the bell of the overnight trading, but later recouped some losses to end 0.99% lower at 118,810 yuan/mt, with open interest falling 1,226 lots to 150,000 lots.

Lead: Three-month LME lead climbed to touch an intraday high of $2,073/mt in the European trading hours on Wednesday before falling sharply to an intraday low of $2,027.5/mt. The contract settled 0.82% weaker at $2,052/mt.

The most-liquid SHFE 2101 lead contract slumped to a nearly two-week low of 14,820 yuan/mt in overnight trading before reversing some losses to close 1.25% weaker at 14,955 yuan/mt, generating a V-shaped movement. Positive domestic macroeconomic environment and firm secondary lead costs limited the drop in lead prices.

Tin: Three-month LME tin ended 0.11% lower at $18,805/mt on Wednesday, and is expected to trade between $18,500-19,000/mt today.

The most-liquid SHFE 2102 tin contract fell rapidly to a one-month low of 145,200 yuan/mt after the bell of the overnight trading, before wiping out some losses to close 0.19% lower at 146,060 yuan/mt. Support below will be seen from around 145,000 yuan/mt today.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or to learn more information, please contact: lemonzhao@smm.cn
For more information on how to access our research reports, please contact:service.en@smm.cn
Related News
"Premier Li Qiang Leads State Council Meeting on Enhancing Effective Investment, Boosting Economic Growth"
10 hours ago
"Premier Li Qiang Leads State Council Meeting on Enhancing Effective Investment, Boosting Economic Growth"
Read More
"Premier Li Qiang Leads State Council Meeting on Enhancing Effective Investment, Boosting Economic Growth"
"Premier Li Qiang Leads State Council Meeting on Enhancing Effective Investment, Boosting Economic Growth"
Premier Li Qiang presided over an executive meeting of the State Council to study policy measures for promoting effective investment. The meeting noted that promoting effective investment plays an important role in stabilizing economic growth and strengthening momentum for development. It is necessary to innovate and improve policy measures, and intensify efforts to enhance the efficiency of utilizing funds such as central budget investments, ultra-long-term special treasury bonds, local government special bonds, and new-type policy-based financial instruments. In conjunction with formulating and implementing the 15th Five-Year Plan
10 hours ago
"Guided by Xi Jinping Thought, Implement 20th CPC Congress Spirit, Apply New Development Philosophy...
10 hours ago
"Guided by Xi Jinping Thought, Implement 20th CPC Congress Spirit, Apply New Development Philosophy...
Read More
"Guided by Xi Jinping Thought, Implement 20th CPC Congress Spirit, Apply New Development Philosophy...
"Guided by Xi Jinping Thought, Implement 20th CPC Congress Spirit, Apply New Development Philosophy...
Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we will thoroughly implement the spirit of the 20th National Congress of the Communist Party of China and the plenary sessions of the Party’s 20th Central Committee, fully and faithfully apply the new development philosophy, strengthen top-level design, build computing power interconnection nodes oriented toward national hub periods, major strategic regions, and key industries, establish a system of computing power interconnection nodes, improve the efficiency and service level of public computing power resources, and promote high-quality development of computing power.
10 hours ago
Indirect Iran-US Nuclear Talks in Muscat Show Progress, Omani FM Mediates Tense but Efficient Discussions
11 hours ago
Indirect Iran-US Nuclear Talks in Muscat Show Progress, Omani FM Mediates Tense but Efficient Discussions
Read More
Indirect Iran-US Nuclear Talks in Muscat Show Progress, Omani FM Mediates Tense but Efficient Discussions
Indirect Iran-US Nuclear Talks in Muscat Show Progress, Omani FM Mediates Tense but Efficient Discussions
After intensive indirect consultations, the new round of nuclear talks between Iran and the US in Muscat, the capital of Oman, has achieved phased progress. It is reported that during this round of talks, the Iranian and US delegations did not meet directly. Instead, Omani Foreign Minister Badr acted as an intermediary, conveying a series of core proposals, strategic concerns, and policy positions to the other side. The atmosphere at the talks was tense yet efficient. According to preliminary on-site assessments, although both sides continue to negotiate over specific terms, they have reached a consensus on the key objective of "continuing dialogue."
11 hours ago