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SMM Morning Comments (Dec 11): Shanghai base metals were mostly higher, the LME complex mixed
Dec 11,2020 10:05CST
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Source:SMM
Shanghai base metals rose broadly on Friday morning, holding onto overnight gains, while their counterparts on the LME set for a mixed start.

SHANGHAI, Dec 11 (SMM) — Shanghai base metals rose broadly on Friday morning, holding onto overnight gains, while their counterparts on the LME set for a mixed start.

Shanghai base metals, except for lead and tin, cruised higher in overnight trading. Nickel, the best performer, soared 5.75% to lead the gains, copper jumped 2.4%, aluminium rose 1.7% and zinc increased 1.79%, while lead edged down 0.1% and tin shed 0.14%.

The LME complex performed similarly. Nickel surged 4.29% to lead the gains, copper rose 2.33%, aluminium added 0.54% and zinc firmed 0.39%, while lead weakened 0.57% and tin edged down 0.03%.

Copper: Three-month LME copper jumped 2.33% to close at $7,837/mt on Thursday after hitting its highest since 2013 at $7,900/mt earlier in the session, with open interest increasing 5,413 lots to 319,000 lots.

The most-active SHFE 2101 copper contract advanced 2.4% to settle at 58,500 yuan/mt in overnight trading.

The European Central Bank (ECB) extended its Pandemic Emergency Purchase Programme by 9 months to March 2022, and will provide new long-term loans to banks. Britain began vaccinations this week and they could start as soon as this weekend in the United States. Positive vaccine news further boosted optimism. Overnight, the US dollar index, which tracks the greenback against its peers, fell to touch a low of 90.665, while copper futures performed strongly.

In the spot market, trades have turned quiet gradually as it approaches the end of the year. But domestic supply remained tight due to unstable inflow of imported materials.

LME copper is likely to trade between $7,810-7,900/mt today, and SHFE copper 58,300-58,800 yuan/mt while spot premiums will be seen slightly higher at 60-110 yuan/mt.

Zinc: Three month LME zinc added 0.39% to close at $2,863.5/mt on Thursday, posting a four-day winning streak, with open interest decreasing 2,515 lots to 234,000 lots. Zinc stocks across LME-listed warehouses fell by 1,175 mt to 215,975 mt. The ECB unveiled fresh stimulus measures broadly and US unadjusted consumer price index (CPI) for November topped expectations, which boosted market sentiment, but weak US jobless data limited the upward space for zinc prices. LME zinc is expected to fluctuate between $2,830-2,880/mt today.

The most-traded SHFE 2101 zinc contract climbed 1.79% to settle at 21,840 yuan/mt in overnight trading, with open interest rising 4,286 lots to 93,176 lots. As for fundamentals, treatment charges for domestic zinc concentrate still hovered at low levels, and orders from hardware producers at die-cast zinc alloy plants increased. The January contract is likely to move between 21,300-21,800 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be seen lower at 80-100 yuan/mt.

Nickel: The most-active SHFE 2102 nickel contract soared 5.75% to end at 130,580 yuan/mt in overnight trading, after recording a new high in 2020 at 130,880 yuan/mt earlier in the session, with open interest surging 37,000 lots to 195,000 lots. The ECB increased the overall size of its Pandemic Emergency Purchase Programme by 500 billion euros ($605.40 billion) to 1.85 trillion euros and extended the scheme by 9 months to March 2022, with the aim of keeping government and corporate borrowing costs at record lows.

Lead: Three-month LME lead ended 0.57% lower at $2,081/mt on Thursday.

The most-liquid SHFE 2101 lead contract slid 0.1% to settle at 15,065 yuan/mt in overnight trading, and is expected to fluctuate around 15,000 yuan/mt in the short term.

Tin: Three-month LME tin edged down 0.03% to end at $19,455/mt on Thursday, after earlier registering a new high in 2020 at $19,695/mt. It is expected to fluctuate between $19,000-20,000/mt today.

The most-liquid SHFE 2102 tin contract ended 0.14% lower at 150,720 yuan/mt in overnight trading, after hitting its highest in 2020 at 153,990 yuan/mt earlier in the session. It is likely to move between 148,600-153,000 yuan/mt today.

Copper
Aluminium
Lead
Tin
Zinc
Nickel

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