SMM Morning Comments (Dec 10): Shanghai base metals were mostly higher, while the LME complex fell for the most part

Published: Dec 10, 2020 09:55 (GMT+8)

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Nonferrous metals on the SHFE rose for the most part on Thursday morning, holding onto overnight gains, while their counterparts on the LME cruised lower mostly.

SHANGHAI, Dec 10 (SMM) — Nonferrous metals on the SHFE rose for the most part on Thursday morning, holding onto overnight gains, while their counterparts on the LME cruised lower mostly.

Shanghai base metals gained across the board in overnight trading. Copper added 0.28%, aluminium advanced 1.03%, zinc rose 1.19%, lead inched up 0.13%, nickel climbed 1.72% and tin firmed 0.73%.

The LME complex mostly advanced on Wednesday. Aluminium increased 1.85%, zinc rose 1.55%, nickel added 1.92% and tin gained 1.38%, while copper shed 0.21% and lead edged down 0.1%.

Copper: Three-month LME copper slid 0.21% to close at $7,694/mt on Wednesday, and is expected to trade between $7,670-7,760/mt today.

The most-active SHFE 2101 copper contract added 0.28% to settle at 57,260 yuan/mt in overnight trading, and is likely to move between 57,100-57,600 yuan/mt today while spot premiums will be seen stable at 60-100 yuan/mt.

Overnight, US stocks dropped from highs, with the three major stock indexes all closing lower, while the US dollar index rose slightly, as talks on coronavirus relief package remained in a stalemate in Washington.

Zinc: Three-month LME zinc gained 1.55% to end at $2,852.5/mt on Wednesday, after recording a new high in more than one and a half years at $2,867/mt earlier in the session. Zinc stocks across LME-listed warehouses plunged by 1,200 mt or 0.55% to 217,150 mt. The advent of mass inoculations in Canada and the United Kingdom and the prospect of the US Food and Drug Administration approving a coronavirus vaccine boosted market optimism, but the stalled talks on US economic stimulus deal and surging Covid-19 cases limited upside space for zinc prices. LME zinc is expected to fluctuate between $2,820-2,870/mt today.

The most-traded SHFE 2101 zinc contract climbed a more than one-week high at 21,635 yuan/mt in overnight trading before giving up some gains to end 1.19% higher at 21,610 yuan/mt. Domestic zinc smelters will conduct maintenance as scheduled in December as zinc concentrate supply remained tight, and this will support zinc prices. The January contract is likely to move between 21,100-21,600 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be seen slightly higher at 120-130 yuan/mt.

Nickel: The most-active SHFE 2102 nickel contract settled 1.72% higher at 123,560 yuan/mt in overnight trading, after setting a new high in nearly one year at 124,950 yuan/mt earlier in the session, with open interest rising 22,000 lots to 168,000 lots.

Lead: Three-month LME lead climbed to a more than one-week high at $2,115/mt before paring some gains to close 0.1% lower at $2,093/mt on Wednesday. Whether the contract could steady above the 2,100 mark today will be monitored.

The most-liquid SHFE 2101 lead contract came off a one-week high of 15,245 yuan/mt to a session low of 15,100 yuan/mt before regaining some ground to close 0.13% firmer at 15,145 yuan/mt in overnight trading. Downstream users have started to conduct year-end stockpiling and sign long-term contracts, which contributed to the uptick in SHFE lead, but domestic lead-acid battery consumption remained weak.

Tin: Three-month LME tin increased 1.38% to end at $19,460/mt on Wednesday, and is expected to trade between $19,000-20,000/mt today.

The most-liquid SHFE 2102 tin contract ended 0.73% firmer at 150,740 yuan/mt in overnight trading, and pressure above will be seen from the 153,000 mark today.

Copper Aluminium Lead Tin Nickel Zinc

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.

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