SMM Morning Comments (Jan 22): Shanghai base metals performance mixed as traders monitored the beginning of Joe Biden’s presidency

SHANGHAI, Jan 22 (SMM) — Shanghai base metals traded mixed on Friday morning as traders monitored the European Central Bank's latest meeting and the beginning of Joe Biden's presidency. Meanwhile, their counterparts on the LME also set for a mixed start.

Shanghai base metals closed mixed in overnight trading. Lead slid 0.99%, zinc declined 0.37% and copper weakened 0.19%, while aluminium climbed 1.21%, tin rose 2.43% and nickel increased 0.64%.

The LME complex performed similarly on Thursday. Tin was the best performer with a rise of 1.66%. Aluminium advanced 0.58%, nickel edged up 1.1%, while copper slid 0.09%, lead declined 0.25% and zinc weakened 0.71%.

Copper: Three-month LME copper fell 0.09% to end at $8,034/mt on Thursday, and is likely to trade between $8,000-8,090/mt today.

The most-active SHFE 2103 copper contract went down 0.47% to close at 59,060 yuan/mt in overnight trading, and it is expected to move between 58,900-59,400 yuan/mt today, while spot premiums will be seen at 90-140 yuan/mt.

According to the economic data released by the US last night, the economic recovery gained some upward momentum, which combined with investors' continued optimistic expectations of the economic stimulus plan, which made the macro sentiment warm. However, the uncertainty brought by the COVID-19 to the economy made investors cautious, and copper was likely to continue to fluctuate in the near term. On the spot side, the quoted shippers are far larger than the inquiry buyers, and the downstream orders are hard to see improvement after entering the end of January.

Zinc: Three-month LME zinc fell 0.71% to close at $2,708.5/mt on Thursday. Zinc stocks at LME-listed warehouses fell 2,325 mt to 191,875 mt. The US economic stimulus plan is expected to boost the trend of zinc. However, under the background of the continuous fermentation of pandemics in various countries, the number of initial jobless claims in the US was still at a high level, and the economic prospects of the euro zone were still facing downside risks, which is expected to limit its upside space. The contract is likely to trade between $2,700-2,750/mt today.

The most-liquid SHFE 2103 zinc contract fell 0.37% to end at 20,435 yuan/mt in overnight trading. The US planned to compete with China's economic strategy and "the belt and road initiative" on a global scale, and the downstream consumption continued to weaken near the end of the year, which increased investors' risk aversion. The holiday time of enterprises will be monitored in the near term. The SHFE zinc contract is expected to move between 20,300-20,800 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be seen higher at 170-180 yuan/mt.

Nickel: The most-active SHFE 2103 nickel contract rose 0.94% to close at 135,770 yuan/mt on Thursday. Open interests fell 2,778 lots to 199,000 lots. The contract will test support from 135,000 yuan/mt today.

Lead: Three-month LME lead settled 0.25% lower at $2,034/mt on Thursday. The US dollar index fluctuated and weakened, and the support for base metals from expectations to Biden's stimulus bill remained.

The most-active SHFE 2103 lead contract went up 0.99% to close at 15,035 yuan/mt on Thursday night. Secondary lead enterprises began a holiday and storage battery purchase and restock have been completed at the same time, and SHFE lead upward momentum is slightly insufficient.

Tin: Three-month LME tin closed up 1.66% at $22,100/mt on Thursday. The contract is expected to keep firm due to the worry of supply shortage. Pressure above will be seen from $22,000 /mt today. Support below will be seen from $21,000/mt today.

The most-liquid SHFE 2103 tin contract rose 1.28% at 163,790 yuan/mt on Thursday night. The reduction of domestic circulation spot supported the premium and tin prices. SHFE tin is expected to trade robustly in the near term. Pressure above will be seen from 165,000 yuan/mt today.