SMM Evening Comments (Jan 29): Shanghai nonferrous metals declined for the most part, aluminium advanced 1.32%

SHANGHAI, Jan 29 (SMM) – SHFE nonferrous metals broadly fell on Friday January 29.

Shanghai nonferrous metals, except for tin and aluminium, traded lower on Friday January 29. Lead dropped 1.66% to lead the losses, zinc shed 0.49%, copper declined 0.78%, and nickel fell 0.84%, while aluminium advanced 1.32% and tin climbed 0.3%.

The ferrous complex fell across the board. Hot-rolled coil went down 2.12%, iron ore shed 2.03%, and rebar fell 1.39%.

Copper: The most-traded SHFE 2103 copper contract finished the day 0.78% higher at 57,550 yuan/mt. Open interest rose 53,000 lots to 177,000 lots.

The GDP growth of the US slowed down to 4% in the fourth quarter of last year, which was lower than economists' expectations, and the recovery pace in the fields of consumption, real estate and manufacturing was uneven. Last week, the number of initial jobless claims dropped more than expected. The White House press secretary denied that the Biden administration was seeking to split the bail-out plan in two. Senate Majority Leader Schumer said that the Senate will take action on the stimulus plan as early as next week. Domestic liquidity has been tightened, the black swan event has occurred in US stocks, and the market sentiment is not very optimistic. The market mainly focused on capital withdrawal before CNY.

The trend of the new round of stimulus bill in US, and whether the contract could remain above 57,500 yuan/mt will come under scrutiny tonight.

Aluminium: The most-liquid SHFE 2103 aluminium contract finished the day 1.32% higher at 15,005 yuan/mt. Open interest fell 8 lots to 164,633 lots. Short-term impact of spot on futures will be monitored. It is estimated that the contract will fluctuate between 14,930-15,030 yuan/mt tonight.

Zinc: The most-active SHFE 2103 zinc contract slid to a session low of 19,360 yuan/mt and closed down 0.49% at 19,415 yuan/mt. Open interest fell 446 lots to 102,935 lots. Population mobility increased due to the approaching of CNY, panic at home and abroad intensified, consumption expectations further weakened, and zinc prices fell. Zinc prices dropped significantly this week, and the downstream stockpiling intention obviously improved. Considering that it was earlier to resume work after the holiday, which might drive consumption. The fundamental support of zinc still exists, and it is expected to stop falling and rebound tonight. SMM data showed that social inventories of refined zinc ingots across Shanghai, Tianjin, Guangdong, Jiangsu, Zhejiang, Shandong and Hebei decreased 3,500 mt in the week ended January 29 to 138,200 mt. The stocks fell 8,400 mt from Monday January 25.

Nickel: The most-traded SHFE 2103 nickel contract ended the day 1.05% lower at 130,400 yuan/mt today. Open interest fell 29,746 lots to 83,224 lots. Inventories of refined nickel in the Shanghai bonded areas decreased 2,000 mt from a week ago and stood at 16,600 mt as of January 29, showed SMM data.

Lead: The most-traded SHFE 2103 lead contract ended the day 1.66% lower at 15,110 yuan/mt. Open interest fell 2,391 lots to 39,102 lots. Operating rates across licensed smelters of secondary lead in Jiangsu, Anhui, Henan and Guizhou averaged 46.2% in the week, down 1.3 percentage points from the previous week, an SMM survey showed.

Tin: The most-liquid SHFE 2103 tin contract rose to an intraday high of 174,880 yuan/mt and finished the day 0.3% higher at 172,110 yuan/mt today. Open interest fell 3,320 lots to 25,846 lots.