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SMM Morning Comments (Dec 16): Shanghai base metals and advanced broadly on Covid vaccine optimism and US stimulus hopes
Dec 16,2020 09:59CST
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Source:SMM
Nonferrous metals on both SHFE and LME mostly advanced on Wednesday morning, as Covid vaccine rollout in the US and the US and rising hopes for a US fiscal stimulus package boosted market sentiment. 

SHANGHAI, Dec 16 (SMM) — Nonferrous metals on both SHFE and LME mostly advanced on Wednesday morning, as Covid vaccine rollout in the US and the US and rising hopes for a US fiscal stimulus package boosted market sentiment. 

Shanghai base metals, except for copper, closed lower in overnight trading. Aluminium shed 0.12%, zinc weakened 0.35%, lead slid 0.41%, nickel declined 0.34% and tin pulled back 0.56%, while copper inched up 0.05%.

The LME complex rose broadly on Tuesday. Copper added 0.37%, lead increased 1.23%, nickel edged up 0.09% and tin firmed 0.1%, while aluminium shed 0.98% and zinc slid 0.42%.

Copper: Three-month LME copper settled 0.37% higher at $7,807/mt on Wednesday, while the most-traded SHFE 2102 copper contract edged up 0.05% to close at 57,760 yuan/mt in overnight trading.

Increasing hopes of US fiscal stimulus package and vaccine rollout in the US and the UK boosted market sentiment. Data from National Bureau of Statistics of China showed that in November, the total value added of the industrial enterprises above the designated size grew by 7.0% compared with the previous year, the largest year-on-year increase since March 2019. In addition, the US dollar index hovered at lows overnight. These supported copper futures.

LME copper is expected to trade between $7,770-7,850/mt today, and SHFE copper between 57,400-57,900 yuan/mt, while spot copper will be traded between discounts of 20 yuan/mt and premiums of 80 yuan/mt.

Zinc: Three-month LME zinc shed 0.42% to end at $2,824.5/mt on Tuesday, with open interest decreasing 5,962 lots to 235,000 lots. Zinc stocks across LME-listed warehouses fell by 150 mt or 0.07% to 213,425 mt. LME zinc is expected to fluctuate between $2,800-2,850/mt today.

The most-liquid SHFE 2102 zinc contract settled 0.35% weaker at 21,340 yuan/mt in overnight trading, with open interest rising 2,175 lots to 77,342 lots. Tight zinc concentrate 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 higher at 150-170 yuan/mt.

Nickel: The most-active SHFE 2102 nickel contract surged to a new high in 2020 of 134,180 yuan/mt after the bell of the overnight trading, before giving up all the gains to close 0.34% lower at 130,720 yuan/mt, with open interest declining 236 lots to 177,000 lots.

Tin: Three-month LME tin added 0.1% to settle at $19,645/mt on Tuesday, with open interest decreasing 540 lots to 18,095 lots. The dollar hovered close to two-year lows on Tuesday as progress toward a massive U.S. government spending bill and COVID-19 relief measures boosted spirits while investors awaited interest rate cues from the Federal Reserve’s final meeting of the year. Tight supply and a weak US dollar underpinned tin prices. LME tin is likely to fluctuate between $19,200-20,000/mt today.

The most-liquid SHFE 2102 tin contract slid 0.56% to end at 151,760 yuan/mt in overnight trading, with open interest increasing 570 lots to 32,027 lots. It is expected to move between 150,000-155,000 yuan/mt today.

Copper
Aluminium
Lead
Tin
Nickel
Zinc

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