SMM Evening Comments (Dec 11): Shanghai nonferrous metals ended mixed, nickel surged 4.67%

SHANGHAI, Dec 11 (SMM) – SHFE nonferrous metals closed mixed on Friday December 11 as as investors kept an eye on negotiations over additional fiscal stimulus in the U.S.

Nickel, the best performer, rose 4.67%, zinc advanced 0.33% and copper climbed 1.23%, while aluminium edged down 0.65%, lead weakened 1.82% and tin shed 0.63%.

The ferrous complex closed mixed. Hot-rolled coil decreased 0.55%, rebar slipped 0.2%, while Iron ore rose 4.38%.

Copper: The most-traded SHFE 2101 copper contract finished the day 1.23% lower at 57,030 yuan/mt. Open interest fell 5,821 lots to 103,000 lots.

The meeting of the European Central Bank announced that the emergency bond purchase program has increased 500 billion euros and extended for 9 months, and will also provide new long-term loans to commercial banks to release liquidity again. In addition, both parties in the US indicated that they would stimulate progress in negotiations. Europe and America released positive signals of liquidity, boosting confidence in the capital market, and bulls swarmed in. However, US Initial Claims unexpectedly surged to 853,000 last week, reaching the highest level since September, and Continuing Jobless Claims rose for the first time since August, resulting in a sharp drop in the US dollar index from 91.1 to 90.6 last night, which also boosted copper prices to a certain extent. However, due to the pandemic still fermenting, long positions made short-term profits during the day and copper prices fluctuated around 58,000 yuan/mt.

The trend of LME copper and US PPI annual rate for November will come under scrutiny tonight.

Aluminium: The most-liquid SHFE 2101 aluminium contract finished the day 0.65% lower at 16,110 yuan/mt. Open interest fell 9,200 lots to 124,782 lots.

Zinc: The most-active SHFE 2101 zinc contract closed up 0.33% at 21,525 yuan/mt. Open interest fell 3,528 lots to 85,362 lots. The shortage at the ore end has not been further aggravated, and the mining processing fee is flat month on month. The weakening of domestic macro sentiment will be monitored in the near term, and it is expected that the contract will have a callback risk tonight.

Nickel: The most-traded SHFE 2102 nickel contract ended the day 4.67% higher at 129,250 yuan/mt today. Open interest rose 13,924 lots to 171,393 lots. Inventories of refined nickel in the Shanghai bonded areas decreased 1,000 mt from a week ago and stood at 22,800 mt as of December 11, showed SMM data.

Lead: The most-traded SHFE 2101 lead contract rose to an intraday high of 15,205 yuan/mt after opening and ended the day 1.82% lower at 14,805 yuan/mt. Open interest rose 4,121 lots to 35,351 lots. Lead ingots stocks piled up sharply. The funds returned by the battery factory at the end of the year showed signs of production reduction. The situation of oversupply of lead will continue in the near term. In addition, when entering LME trading time, the rise of the US dollar index will put pressure on the upward trend of LME Lead, which is likely to further boost domestic short positions. Short positions are likely to try to move above 60-day moving average of 14,750 yuan/mt.

Tin: The most-liquid SHFE 2102 tin contract climbed to a session high of 153,990 yuan/mt and finished the day 0.63% lower at 149,980 yuan/mt today. Open interest fell 1,146 lots to 32,534 lots.