SMM Evening Comments (Dec 30): Shanghai nonferrous metals declined for the most part, aluminium advanced 0.1%

SHANGHAI, Dec 30 (SMM) – SHFE nonferrous metals broadly fell on Wednesday December 30 after major indexes on Wall Street snapped their multi-day winning streaks overnight. Meanwhile, the dollar weakened against other major currencies.

China’s 2019 GDP growth was revised downward to 6.0%, according to a statement released Wednesday by the country’s National Bureau of Statistics. That compared against a pre-revision 2019 growth rate of 6.1%.

Shanghai nonferrous metals, except for aluminium, traded lower on Wednesday December 30. Nickel dropped 2.28% to lead the losses, zinc shed 1.99%, lead declined 0.61%, copper went down 0.17% and tin fell 0.97%, while aluminium advanced 0.1%.

The ferrous complex closed mixed. Rebar advanced 0.31%, hot-rolled coil rose 0.25%, while iron ore fell 3.48%.

Copper: The most-traded SHFE 2102 copper contract finished the day 0.17% lower at 58,480 yuan/mt. Open interest fell 3,333 lots to 113,000 lots. Republicans in the US Senate blocked legislation to raise individual bail-out subsidies from $600 to $2,000. In addition, it is reported that the leaders of EU and China will announce the successful conclusion of the China-EU investment agreement negotiations on Wednesday, and plan to finalize the final text in the next few months, which will require the approval of the European Parliament after that. In terms of pandemic situation, the first case of infected mutant strain was found in the US. President-elect Biden criticized the Trump administration for its slow vaccine distribution, and put forward a detailed plan to speed up vaccination, including the activation of the National Defense Production Act, which promised to distribute 100 million doses of vaccine within 100 days of taking office. The US dollar index once again fell below 90 and fluctuated to a low level near 89.75. US EIA Crude Oil Stocks Change as of December 25 will come under scrutiny tonight. The contract is expected to fluctuate between five-day moving average and 20-day moving average.

Aluminium: The most-liquid SHFE 2102 aluminium contract finished the day 0.1% higher at 15,490 yuan/mt. Open interest fell 3,233 lots to 113,464 lots.

Zinc: The most-active SHFE 2102 zinc contract closed down 1.99% at 20,920 yuan/mt. Open interest fell 692 lots to 86,688 lots. The decline in the past two days has basically reflected the long-term worries and expectations, and the fundamentals are still improving at present. With the zinc ore shortage, the probability of zinc price falling further is low. The contract is expected to keep fluctuating tonight.

Nickel: The most-traded SHFE 2103 nickel contract ended the day 2.28% lower at 125,250 yuan/mt today. Open interest rose 959 lots to 152,984 lots.

Lead: The most-traded SHFE 2102 lead contract slid to a session low of 14,630 yuan/mt and ended the day 0.61% lower at 14,720 yuan/mt. Open interest rose 507 lots to 31,152 lots. The spot market is approaching the off-season at the end of the year. Spot prices are changed from discount to premium, mainly because holders have no intention selling at low prices, and the transaction volume is limited. The market has entered the countdown of New Year's Eve, and trading will not become active again. Both long and short positions will be operated cautiously, and the night trading will maintain the range fluctuation between the moving averages.

Tin: The most-liquid SHFE 2103 tin contract rose to an intraday high of 154,380 yuan/mt and finished the day 0.97% lower at 151,800 yuan/mt today. Open interest rose 1,859 lots to 31,039 lots. The contract is expected to keep fluctuating in the near term. Pressure above is expected to around 155,000 yuan/mt. Support below is expected to around 150,000 yuan/mt.