SMM Evening Comments (Feb 4): Shanghai nonferrous metals closed mostly higher, tin fell 1.44%

SHANGHAI, Feb 4 (SMM) – SHFE nonferrous metals rose for the most part on Thursday February 4 as pessimism about the US economic outlook receded before the release of important data on the jobs market.

Aluminium, the best performer, rose 1.97%, zinc advanced 1.76%, lead went up 0.43%, copper climbed 1.26% and nickel gained 0.16%, while tin dropped 1.44%.

The ferrous complex rose across the board. Iron ore surged 5.26%, rebar rose 1.94%, and hot-rolled coil climbed 1.27%.

Copper: The most-traded SHFE 2104 copper contract finished the day 1.26% higher at 57,870 yuan/mt. Open interest rose 5,120 lots to 80,777 lots.

US President Biden refused to make concessions on the amount of bail-out cheques, but was willing to consider stricter payment standards. Senator Romney said that if no changes were made, no Republican would support Biden's $1.9 trillion stimulus plan, and the new round of stimulus bill was deadlocked. The US Treasury Department raised the amount of refinancing bonds issued next week to a record $126 billion. The issuance scale of long-term national debt remains unchanged, waiting for the new stimulus plan to be finalized. OPEC+ said it will continue to work hard to quickly eliminate the excess oil supply caused by the COVID-19 outbreak. Stimulated by this, WTI crude oil futures continued to hit a new high for more than one year, and copper prices finally returned to above 57,500 yuan/mt.

US Initial Jobless Claims 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 1.97% higher at 15,280 yuan/mt. Open interest rose 1,344 lots to 168,558 lots. Social inventories of primary aluminium across eight consumption areas in China, including SHFE warrants, rose 32,000 mt from the prior week to 714,000 mt as of February 4.

Zinc: The most-active SHFE 2103 zinc contract climbed to an intraday high of 19,980 yuan/mt and closed up 1.76% at 19,925 yuan/mt. Open interest fell 9,572 lots to 84,284 lots. The consumption of zinc ingots exceeded market expectations in January, and the increase of zinc prices repaired the oversold space in the early stage, and the consumption expectation after February holiday was better. The pressure from 15-day moving average above will continue to be monitored tonight. The contract is expected to fluctuate strongly tonight.

Nickel: The most-traded SHFE 2104 nickel contract ended the day 0.16% higher at 130,500 yuan/mt today. Open interest rose 2,438 lots to 156,811 lots.

Lead: The most-traded SHFE 2103 lead contract slid to a session low of 14,820 yuan/mt and ended the day 0.43% higher at 15,020 yuan/mt. Open interest fell 3,175 lots to 32,072 lots. Spot trading is getting more and more tepid, a small amount of circulating spot premium is quite high, and the downstream centralised purchasing is completed, which may be difficult to support SHFE lead. At night. Whether the contract will once again remove below 14,900 yuan/ton will be monitored tonight.

Tin: The most-liquid SHFE 2103 tin contract fell to a session low of 162,800 yuan/mt and finished the day 0.28% lower at 163,720 yuan/mt today. Open interest fell 1,655 lots to 10,415 lots. Guidance of LME tin on the trend of SHFE tin will be monitored. It is expected that the contract will keep fluctuating in the near term due to the weakening of trading near the CNY holiday. Pressure above will be seen from 168,000 yuan/mt today. Support below will be seen from 162,000 yuan/mt today.