SMM Evening Comments (Dec 25): Shanghai nonferrous metals rose across the board for the 2nd day

SHANGHAI, Dec 25 (SMM) – SHFE nonferrous metals closed higher across the board on Friday December 25.

Nickel was the best performer with a rise of 1.86%. Copper advanced 0.65%, aluminium edged up 0.28%, tin climbed 1.3%, zinc increased 1.21% and lead went up 0.72%.

Social inventories of silicon metal across Huangpu port, Kunming city and Tianjin port remained unchanged from a week ago at 75,000 mt as of Friday December 25, SMM data showed.

The ferrous complex closed mixed. Rebar advanced 0.81%, iron ore rose 2.02%, while hot-rolled coil fell 0.8%.

Copper: The most-traded SHFE 2102 copper contract finished the day 0.65% higher at 58,560 yuan/mt. Open interest rose 1,312 lots to 117,000 lots.

Britain and EU reached a historic post-Brexit trade agreement. After December 31, Britain and EU will trade goods with zero tariff and no quota, but this does not apply to service industry or financial service industry. The British Parliament is no longer subject to the EU. To some extent, it stimulates copper prices to fluctuate upward. In addition, the Brexit trade agreement will take effect temporarily before the European Parliament votes. The British Parliament will vote on December 30, and the leader of the main opposition Labor Party said he would vote for it, which means that the agreement will almost certainly be passed in Parliament. In addition, it was Christmas and New Year overseas, and the market bears were worried and gradually left the market to raise copper prices.

The Christmas holidays also had a significant impact on the domestic market, the turnover slowed down obviously, and the contract kept fluctuating rangebound.

Aluminium: The most-liquid SHFE 2102 aluminium contract finished the day 0.28% higher at 15,900 yuan/mt. Open interest fell 1,005 lots to 111,777 lots.

Zinc: The most-active SHFE 2102 zinc contract climbed to a session high of 21,810 yuan/mt and closed up 1.21% at 21,715 yuan/mt. Open interest rose 3,794 lots to 97,745 lots. Overseas pandemic has not further fermented, and the market has returned to long-term inflation. On fundamentals, imported zinc ore will arrive at ports one after another near January, and raw material stocks of refineries will be restocked. However, the overall shortage of mines has not changed. Negotiations on prices of domestic zinc ore under long-term contracts will start next month. According to the survey, TCs for domestic zinc ore is expected to decrease 400 yuan/metal mt to 4,000 yuan/metal mt in January. It is expected that zinc prices will still have upward momentum tonight.

Nickel: The most-traded SHFE 2103 nickel contract ended the day 1.86% higher at 127,520 yuan/mt today. Open interest rose 6,685 lots to 142,098 lots. Nickel ore inventories across all Chinese ports increased 403,000 wmt from December 18 to 9.25 million wmt as of December 25, showed SMM data.

Lead: The most-traded SHFE 2102 lead contract rose to an intraday high of 14,780 yuan/mt and ended the day 0.72% higher at 14,670 yuan/mt. Open interest fell 2,282 lots to 49,629 lots. On the fundamentals, at the end of the year, the supply of primary lead plants is tight, secondary lead are reluctant to be sold and wait for the rise amid tepid downstream consumption. Lead prices will remain firm. Whether long positions will enter the market to move above 14,700 yuan/mt will be monitored tonight.

Tin: The most-liquid SHFE 2102 tin contract fell to a session low of 151,400 yuan/mt and finished the day 1.3% higher at 153,170 yuan/mt today. Open interest fell 2,108 lots to 19,670 lots.