SMM Evening Comments (Jan 12): Shanghai nonferrous metals all closed lower, aluminium weakened 1.35%

SHANGHAI, Jan 12 (SMM) – SHFE nonferrous metals fell across the board on Tuesday January 12. Copper declined 1.26%, aluminum shed 1.35%, zinc weakened 1.18%, lead dropped 0.82%, nickel edged down 0.08% and tin fell 1.19%.

SMM data showed that a total of 101 vessels carrying 16.29 million mt of iron ore arrived at major Chinese ports during January 3-9, SMM estimates. This was up 2.03 million mt from the previous week, and 2.11 million mt from the same period last year. Arrivals plunged by more than 17% in Shandong.

Copper: The most-traded SHFE 2103 copper contract finished the day 1.26% lower at 58,710 yuan/mt, with open interest rising 6,954 lots to 110,000 lots.    

President-elect Joe Biden, who takes office on Jan. 20 with his Democratic party in control of both Houses, has promised “trillions” in extra pandemic-relief spending. As the yield on the benchmark US 10-year Treasury bond rose to 1.156%, US dollar returned above 90, pressuring copper prices.    China’s social financing and M2 money supply for December set for release tonight will be monitored. Whether the March copper contract could steady above 58,000 yuan/mt tonight will also be watched.

Zinc: The most-active SHFE 2102 zinc contract finished the day 1.18% lower at 20,885 yuan/mt after hitting a nearly two-week low at 20,650 yuan/mt earlier in the session.

Nickel: The most-liquid SHFE 2103 nickel contract edged down 0.08% to close the day at 129,920 yuan/mt, with open interest decreasing 1,666 lots to 168,529 lots.           

Lead: The most-active SHFE 2103 lead contract dropped 0.82% to end the day at 14,550 yuan/mt, with trading volume decreasing 19,000 lots to 30,000 lots. Lead supply tightened as both primary and secondary lead smelters were reluctant to sell. Production costs of secondary lead also lent support to lead prices. Whether the contract could steady above 14,500 yuan/mt tonight will be watched.

Tin: The most-traded SHFE 2103 tin contract fell to a one week low of 151,520 yuan/mt before reversing some losses to close the day 1.19% lower at 153,240 yuan/mt, with open interest losing 3,060 lots to 30,835 lots. Support below will be seen from the 151,000 yuan/mt mark tonight.