SMM Evening Comments (Feb 5): Shanghai nonferrous metals closed mostly higher, tin fell 0.22%

SHANGHAI, Feb 5 (SMM) – SHFE nonferrous metals rose for the most part on Friday February 5 following overnight gains stateside that saw the S&P 500 hitting a record closing high.

Aluminium, the best performer, rose 2.5%, zinc advanced 1.18%, lead went up 2%, copper climbed 1.01% and nickel gained 2.12%, while tin dropped 0.22%.

The ferrous complex rose across the board. Iron ore surged 4.2%, rebar rose 1.64%, and hot-rolled coil climbed 1.95%.

Copper: The most-traded SHFE 2103 copper contract finished the day 1.01% higher at 58,210 yuan/mt. Open interest fell 5,090 lots to 101,000 lots.

Initial jobless claims in the US reached the lowest level since the end of November, indicating a slowdown in layoffs. Minneapolis Fed President said that the financial relief policy should be linked to the job market indicators. However, the Bank of England kept the benchmark interest rate and bond purchase scale unchanged yesterday, and it is expected that the country's economy will rebound rapidly under the impetus of the bold vaccination program.

US nonfarm data in January, US trade account in December and whether the contract could move above 58,500 yuan/mt will come under scrutiny tonight.

Aluminium: The most-liquid SHFE 2103 aluminium contract finished the day 2.5% higher at 15,555 yuan/mt. Open interest rose 6,152 lots to 174,710 lots.

Zinc: The most-active SHFE 2103 zinc contract climbed to an intraday high of 20,165 yuan/mt and closed up 1.76% at 19,925 yuan/mt. Open interest fell 3,834 lots to 80,450 lots. US Initial Jobless Claims reached a new low since November. The Federal Reserve President of the US expressed support for the implementation of quantitative easing economic policy in the past two weeks. On the fundamentals, zinc ingot output remained at a high level in January, indicating that the consumption in January was still good. In addition, under the influence of CNY in February, the refinery output reduced by 64,000 mt month on month, which supported the strong operation of zinc prices. The 20-day line above may form pressure, and the contract is expected to fluctuate at high tonight.

Nickel: The most-traded SHFE 2104 nickel contract ended the day 2.12% higher at 132,850 yuan/mt today. Open interest rose 6,867 lots to 132,850 lots. Inventories of refined nickel in the Shanghai bonded areas remained unchanged from a week ago and stood at 16,600 mt as of February 5, showed SMM data.

Lead: The most-traded SHFE 2103 lead contract ended the day 2% higher at 15,275 yuan/mt. Open interest fell 2,057 lots to 30,015 lots. Social inventories of lead ingots across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin dropped 6,800 mt from the prior week and declined 3,600 mt from February 1 to 36,600 mt as of Friday February 5, an SMM survey showed.

Tin: The most-liquid SHFE 2103 tin contract fell to a session low of 162,500 yuan/mt and finished the day 0.22% lower at 163,550 yuan/mt today. Open interest fell 103 lots to 10,312 lots.