SMM Morning Comments (Dec 15): LME nonferrous metals fell across the board amid increasing concerns of new lockdown measures

Published: Dec 15, 2020 10:00

Save

Shanghai base metals set for a mixed start on Tuesday morning, while their counterparts on the LME fell across the board as investors worried that the continuous spread of Covid-19 may prompt national countries to impose stricter lockdown measures.

SHANGHAI, Dec 15 (SMM) — Shanghai base metals set for a mixed start on Tuesday morning, while their counterparts on the LME fell across the board as investors worried that the continuous spread of Covid-19 may prompt national countries to impose stricter lockdown measures.

Shanghai base metals closed mixed in overnight trading. Copper shed 0.35%, zinc weakened 0.14% and lead slid 0.5%, while aluminium added 0.18%, nickel rose 0.63% and tin increased 1.74%.

The LME complex, except for lead, ended higher on Monday. Copper added 0.12%, aluminium advanced 0.76%, zinc firmed 1.87%, nickel gained 1.76% and tin rose 0.49%, while lead underperformed with a 1.31% loss.

Copper: Three-month LME copper added 0.12% to close at $7,778/mt on Monday, whereas the most-traded SHFE 2101 copper contract shed 0.35% to end at 57,500 yuan/mt in overnight trading.

The Electoral College voted Monday to cement President-elect Joe Biden’s victory over President Donald Trump in this year’s presidential election. The first round of shots from the vaccine developed by Pfizer and BioNTech were given in the U.S. on Monday, but the country also passed 300,000 deaths from Covid-19, according to data from Johns Hopkins University. New York City Mayor Bill de Blasio also warned residents that a full shutdown may be needed to protect the city’s hospitals. Besides, the US dollar index rebounded from lows overnight, which limited upward space for copper futures.

LME copper is expected to trade between $7,730-7,810/mt today, and SHFE copper between 57,400-57,900 yuan/mt while spot copper is likely to be traded between discounts of 10 yuan/mt and premiums of 70 yuan/mt.

Zinc: Three-month LME zinc settled 1.87% higher at $2,836.5/mt on Monday, with open interest rising 4,679 lots to 241,000 lots. Zinc stocks across LME-listed warehouses plunged by 1,300 mt or 0.61% to 213,575 mt. The rollout of Pfizer vaccine and Biden’s winning of presidential election lifted market sentiment, while the continuous spread of Covid-19 exerted negative impact on global economic recovery, which put some pressure on zinc prices. LME zinc is expected to fluctuate between $2,790-2,840/mt today.

The most-liquid SHFE 2101 zinc contract pulled back 0.14% to close at 21,425 yuan/mt in overnight trading, with open interest decreasing 2,052 lots to 77,989 lots. Currently, treatment charges for both domestic and seaborne zinc concentrate remained at low levels, lowering profits at zinc smelters and driving them to reduce production. Relative tight zinc supply was still supportive to zinc prices. The January contract is likely to move between 21,000-21,500 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be seen stable at 90-110 yuan/mt against the contract.

Nickel: The most-active SHFE 2102 nickel contract advanced 0.63% to end at 131,050 yuan/mt in overnight trading, with open interest increasing 4,307 lots to 179,000 lots.

Lead: Three-month LME lead shed 1.31% to settle at $2,030/mt on Monday, posting a four-day losing streak. Lead stocks across LME-listed warehouses surged by about 10,000 mt.

The most-liquid SHFE 2101 lead contract weakened 0.5% to end at 14,790 yuan/mt in overnight trading. Zinc inventories in China have increased for nine straight weeks, which pressured SHFE lead.

Tin: Three-month LME tin ended 0.49% firmer at $19,625/mt on Monday, after recording a new high in 2020 at $19,765/mt earlier in the session. On Monday, the US dollar index at one point fell to 90.419, its lowest since April 2018. European countries imposed stricter restrictions and the New York City may enter a full lockdown to curb the spread of Covid-19, which boosted risk-off sentiment. LME tin is expected to fluctuate between $19,200-20,000/mt today.

The most-liquid SHFE 2102 tin contract rose 1.74% to settle at 153,540 yuan/mt in overnight trading, with open interest rising 1,931 lots to 33,558 lots. The February tin contract is likely to move between 149,400-155,000 yuan/mt 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.

For any inquiries or for 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

6 mins ago

[SMM Analysis]Millberry Payability Returns to High Levels—Why Are No. 1 and No. 2 Copper Scrap Lagging?

[SMM Analysis: Millberry Payability Returns to High Levels—Why Are No. 1 and No. 2 Copper Scrap Lagging?]According to SMM market research, Millberry payability has returned to 98%-99%, while No. 1 copper scrap is quoted at 95.5%-96.5% and No. 2 at 94.5%-95.5%. Market tightness is therefore concentrated in clean, high-grade material.

6 mins ago

17 mins ago

Peru Targets at Least US$33 Billion in Mining Investment as Government Moves to Accelerate Project Approvals

Peru’s new government is targeting at least US$33 billion in mining investment over the next five years, while moving to accelerate approvals for exploration and extraction projects in an effort to convert the country’s extensive mineral resources and project pipeline into new production. Prime Minister Luis Galarreta told Congress that President Keiko Fujimori’s administration, which took office in July, plans to authorize 240 exploration and extraction projects this year. Private companies are expected to provide the investment, while the government intends to focus on legal certainty, more predictable permitting and faster decision-making. Officials will seek to reduce delays and overlapping procedures without weakening environmental or social requirements. The push is particularly significant for the copper market. Peru produced 2.77 million tonnes of copper in 2025, up 1.2% year on year, according to the Ministry of Energy and Mines, marking the country’s highest annual copper production on record. Peru remains one of the world’s largest copper-producing countries, meaning improvements in project execution could have meaningful implications for longer-term global mine supply. The investment target also comes against the backdrop of a sizeable existing project pipeline. MINEM’s 2026 Mining Investment Project Portfolio comprises 66 projects with combined estimated investment of US$64.08 billion, while eight mining projects representing around US$7.62 billion had already been identified for the start of execution during 2026. For the copper market, the key issue is therefore less Peru’s geological potential than the speed at which projects can move through permitting, financing and construction. The Fujimori government’s plan to authorize hundreds of projects and reduce administrative bottlenecks could help unlock part of Peru’s large copper development pipeline, although the eventual production impact will depend on which projects actually progress into construction and operation.

17 mins ago

36 mins ago

Copper Cathode Social Inventory Sees Significant Drawdown, All Regions Simultaneously Digest Spot Copper [SMM Weekly Data]

36 mins ago