SMM Evening Comments (Dec 24): Shanghai nonferrous metals rose across the board, lead rose 1.57%

SHANGHAI, Dec 24 (SMM) – SHFE nonferrous metals closed higher across the board on Thursday December 24.

China’s State Administration for Market Regulation said through official online channels it has opened an investigation into Alibaba over monopolistic practices. The news was first reported by Bloomberg, and was announced by Chinese state news agency Xinhua.

Lead was the best performer with a rise of 1.57%. Copper advanced 0.75%, aluminium edged up 1.5%, tin climbed 0.62%, zinc increased 0.26% and nickel went up 0.62%.

The ferrous complex closed mixed. Hot-rolled coil decreased 1.08%, rebar slipped 0.39%, while iron ore rose 0.93%.

Copper: The most-traded SHFE 2102 copper contract finished the day 0.75% higher at 58,130 yuan/mt. Open interest rose 1,097 lots to 116,000 lots.

US jobless claims totalled 803,000 during the week ending December 19, better than an estimate of 888,000 according to economists polled by Dow Jones. However, core durable goods and personal income both fell short of expectations in November. US New home sales fell a steeper-than-expected 11% in November from October, according to the U.S. Census. October’s reading was also revised lower. Sales hit an annualised rate of 841,000, down from the 979,000 peak in July. These numbers are based on contracts signed, not closings. Sales were up 20.8% year over year.

The trend of LME copper, US Bloomberg Consumer Confidence Index and whether the contract could follow up LME copper will come under scrutiny tonight.

Aluminium: The most-liquid SHFE 2102 aluminium contract finished the day 1.5% higher at 15,940 yuan/mt. Open interest rose 6,176 lots to 112,782 lots. SMM data showed that stocks of 6063 aluminium billet across the five major consumption areas – Foshan, Wuxi, Huzhou, Changzhou and Nanchang – in China shrank 600 mt from the prior week to 72,400 mt as of December 24.

Zinc: The most-active SHFE 2102 zinc contract closed up 0.26% at 21,450 yuan/mt. Open interest fell 724 lots to 94,000 lots. Overseas panic about the pandemic has returned to calm, and the zinc ore shortage situation has not changed fundamentally. Improved downstream restocking demand at low prices provided zinc prices support. The pandemic situation will be monitored in the near term, and the contract is expected to stop falling and stabilise tonight.

Nickel: The most-traded SHFE 2103 nickel contract ended the day 0.62% higher at 125,140 yuan/mt today. Open interest rose 8,330 lots to 125,140 lots.

Lead: The most-traded SHFE 2102 lead contract ended the day 1.57% higher at 14,590 yuan/mt. Open interest rose 3,662 lots to 34,887 lots. On the fundamentals, the willingness to ship primary lead was still low, but the secondary lead was actively shipped, and the discount expanded, while the enthusiasm of downstream restocking declined with the rebound of lead prices. The upward pressure of SHFE lead is still relatively large, and it is expected that it will keep fluctating in the near term. The pressure from the five-day moving average of 14,550 yuan/mt will be monitored tonight.

Tin: The most-liquid SHFE 2102 tin contract climbed to a session high of 151,880 yuan/mt and finished the day 0.68% higher at 151,400 yuan/mt today. Open interest fell 1,484 lots to 21,778 lots. The contract is expected to keep fluctuating in the near term. Pressure above is expected to around 152,000 yuan/mt. Support below is expected to around 148,000 yuan/mt.