SMM Morning Comments (Dec 28): Shanghai base metals were mostly higher as data shows China’s industrial profits rose in November

Published: Dec 28, 2020 09:23 (GMT+8)

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Shanghai base metals advanced for the most part on Monday morning as data showed that China’s industrial profits rose in November.

SHANGHAI, Dec 28 (SMM) — Shanghai base metals advanced for the most part on Monday morning as data showed that China’s industrial profits rose in November.

Profits at Chinese industrial firms in November rose 15.5% as compared with a year earlier, according to data released by the country’s National Bureau of Statistics over the weekend.

Shanghai base metals mostly closed higher on last Friday night. Copper added 0.15%, zinc advanced 0.79%, lead gained 1.37% and nickel firmed 1.1%, while aluminium shed 0.91% and tin slid 0.22%.

The London Metals Exchange was closed last Friday for the Christmas holiday.

Copper: The most-traded SHFE 2102 copper contract added 0.15% to close at 58,340 yuan/mt on last Friday night. Following the lockdown in Britain, the Japanese government adopted entry restrictions to curb the spread of the virus. SHFE copper is expected to move between 57,900-58,400 yuan/mt today, while spot copper will be traded between discounts of 70 yuan/mt and premiums of 30 yuan/mt.

Nickel: The most-active SHFE 2103 nickel contract rose 1.1% to settle at 127,880 yuan/mt on last Friday night, with open interest rising 6,437 lots to 149,000 lots. Pressure above from the ten-day moving average will be monitored today.

Zinc: The most-liquid SHFE 2102 zinc contract ended 0.79% higher at 21,785 yuan/mt on last Friday night, with open interest increasing 682 lots to 98,427 lots. Treatment charges (TCs) for zinc concentrate continued to fall, and zinc consumption in east and south China remained strong even though operating rates at galvanising producers in north China extended declines. The February contract is likely to move between 21,500-22,000 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be seen stable at 90-110 yuan/mt against the January contract.

Lead: The most-traded SHFE 2102 lead contract rose 1.37% to close at 14,840 yuan/mt on last Friday night. Lead stocks across SHFE-listed warehouses declined slightly last week, after building up for ten consecutive weeks. Lead supply is expected to be affected by environmental restrictions this week, while consumption is likely to weaken as it approaches the end of the year.

Tin: The most-active SHFE 2102 tin contract shed 0.22% to end at 152,500 yuan/mt on last Friday night, with open interest decreasing 4061 lots to 15609 lots. SHFE tin is likely to fluctuate between 150,000-156,000 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.

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