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SMM Morning Comments (Dec 29): LME base metals were mostly higher after trading resumed
Dec 29,2020 09:45CST
price review forecast
Source:SMM
Shanghai base metals mostly cruised lower on Tuesday morning, while their counterparts on the LME rose for the most part as market sentiment was boosted after Trump signed into law the $2.3 trillion pandemic aid and spending package.

SHANGHAI, Dec 29 (SMM) — Shanghai base metals mostly cruised lower on Tuesday morning, while their counterparts on the LME rose for the most part as market sentiment was boosted after Trump signed into law the $2.3 trillion pandemic aid and spending package.

Shanghai base metals fell across the board in overnight trading. Copper edged down 0.03%, aluminium shed 0.95%, zinc weakened 0.46% and tin slid 0.12%, while lead firmed 0.4% and nickel gained 0.78%. 

The London Metals Exchange was closed on Monday.  

Copper: The most-traded SHFE 2102 copper contract edged down 0.03% to close at 58,720 yuan/mt in overnight trading.

Overnight on Wall Street, the three major US stock indexes recorded fresh highs after President Donald Trump signed a $900 billion coronavirus relief package into law. Oil prices declined on Monday as OPEC+ is set to boost output by 500,000 barrels per day in January and Russia supports another increase of the same amount in February.

LME copper is expected to trade between $7,820-7,900/mt today, while SHFE copper between 58,700-59,200 yuan/mt, with spot copper to be traded between discounts of 150 yuan/mt and 70 yuan/mt.

Zinc: Trump signed into law the $2.3 trillion pandemic aid and spending package, averting a partial federal government shutdown that would have started Tuesday, and this, together with optimism over the signing of Brexit trade deals between Britain and the European Union, is likely to boost zinc prices. LME zinc is expected to fluctuate between $2,830-2,880/mt today.

The most-active SHFE 2102 zinc contract shed 0.46% to end at 21,595 yuan/mt in overnight trading, with open interest decreasing 839 lots to 94,261 lots. Zinc concentrate supply was still tight. SMM zinc social inventories increased over last weekend, but consumption in east and south China remained firm.  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 80-110 yuan/mt against the January contract.

Nickel: The most-liquid SHFE 2103 nickel contract added 0.78% to settle at 128,720 yuan/mt in overnight trading, with open interest rising 4,848 lots to 152,000 lots.

Lead: The most-traded SHFE 2102 lead contract gained 0.4% to close at 14,915 yuan/mt in overnight trading, after hitting a one-week high at 14,990 yuan/mt earlier in the session. Primary lead was traded at premiums due to its relatively tight supply, and this drove some downstream users to secondary lead.

Tin: Trading will resume on the London Metals Exchange today, and LME tin is likely to trade between $19,800-20,300/mt today.

The most-active SHFE 2103 tin contract ended 0.12% weaker at 153,310 yuan/mt in overnight trading, after earlier hitting a one-week high at 154,240 yuan/mt, with open interest increasing 4,037 lots to 25,516 lots. SHFE tin is likely to fluctuate between 150,000-156,000 yuan/mt today.

Copper
Aluminium
Lead
Tin
Zinc
Nickel

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