SMM Morning Comments (Jan 19): Shanghai base metals were mostly higher as investors awaited remarks from Joe Biden

SHANGHAI, Jan 19 (SMM) — Shanghai base metals were mostly higher on Tuesday morning as investors awaited remarks from US President-elect Joe Biden's nominee for Treasury secretary, Janet Yellen. Meanwhile, their counterparts on the LME also rose for the most part.

Shanghai base metals mostly advanced in overnight trading. Copper added 0.41%, tin rose 0.61%, zinc went up 0.12% and nickel strengthened 0.61%, while aluminium slid 0.2% and lead fell 0.4%.

The LME complex performed similarly on Monday. Copper advanced 0.14%, tin edged up 0.47%, lead climbed 0.2% and nickel increased 0.25%, while zinc and aluminium underperformed with 0.3% and 0.61% losses respectively.

Copper: Three-month LME copper rose 0.14% to end at $7,945/mt on Monday, and is likely to trade between $7,920-8,000/mt today.

The most-active SHFE 2103 copper contract went down 0.52% to close at 58,970 yuan/mt in overnight trading, and it is expected to move between 58,800-59,300 yuan/mt today, while spot premiums will be seen at 120-180 yuan/mt.

Biden will take office as the next president of the US on Wednesday, and Yellen, the nominee of the US Treasury Secretary, will attend the Senate hearing, which is expected to defend the $1.9 trillion economic stimulus plan. The market is optimistic about this. However, at present, the COVID-19 continues to spread, and the increase of COVID-19 cases around the world makes investors take a cautious position. Under risk aversion, the US dollar index hit a high of 90.95 at night, while copper futures dropped slightly at night. On the spot side, social inventories continues to decline, the price-holding merchants have a strong sentiment, and it is difficult to see the downward trend. It is expected that the premium will maintain the price-holding sentiment in the near term.

Zinc: Three-month LME zinc fell 0.3% to close at $2,678/mt on Monday. Zinc stocks at LME-listed warehouses fell 575 mt to 198,125 mt. With the continuous fermentation of the global pandemic, the global economy is still highly uncertain. Countries strengthened the pandemic prevention and control measures to suppress the downward trend of LME zinc, but the expectation of the introduction of additional fiscal stimulus measures by the US is expected to limit its decline. Macro guidelines will be monitored in the near term. The contract is likely to trade between $2,670-2,720/mt today.

The most-liquid SHFE 2103 zinc contract rose 0.12% to end at 20,290 yuan/mt in overnight trading. Strong domestic economic data boosted the trend of domestic metals. On the fundamental side, under the disturbance of pandemic on the consumption side, galvanized enterprises in the north had a holiday in advance, dragging down some consumption. TC on the supply side fell again to limit its decline. The SHFE zinc contract is expected to move between 20,000-20,500 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be seen higher at 160-170 yuan/mt.

Nickel: The most-active SHFE 2103 nickel contract rose 0.61% to close at 134,010 yuan/mt on Monday. Open interests fell 3,491 lots to 195,000 lots. The contract is expected to move between 130,000-136,000 yuan/mt.

Lead: Three-month LME lead settled 0.2% higher at $1,995/mt on Monday.

The most-active SHFE 2103 lead contract went down 0.4% to close at 14,940 yuan/mt on Monday night. The contract is likely to continue to fluctuate at high in the near term.

Tin: Three-month LME tin closed up 0.47% at $21,225/mt on Monday. The tight supply of refined tin overseas supported the trend of LME tin, and the contract is expected to fluctuate strongly. Pressure above will be seen from $21,500 /mt today. Support below will be seen from $20,500/mt today.

The most-liquid SHFE 2103 tin contract rose 0.05% at 156,840 yuan/mt on Monday night. The expected tightening of tin mines brought about by the closure of Bangkang and the recent reduction in circulation spot supported tin prices. The guidance given by the trend of LME tin and its surrounding markets will be monitored. SHFE tin is expected to keep fluctuating robustly today. Pressure above will be seen from 158,000 yuan/mt today. Support below will be seen from 155,000 yuan/mt today.