SMM Evening Comments (Feb 8): Shanghai nonferrous metals closed mostly higher, lead fell 0.1%

SHANGHAI, Feb 8 (SMM) – SHFE nonferrous metals rose for the most part on Monday February 8 with markets tracking positive sentiment in Asia and the US.

Aluminium, the best performer, rose 2.1%, zinc advanced 0.4%, tin went up 1.59%, copper climbed 1.54% and nickel gained 1.68%, while lead dropped 0.22%.

The ferrous complex rose across the board. Iron ore increased 2.9%, rebar rose 1.81%, and hot-rolled coil climbed 2.83%.

Copper: The most-traded SHFE 2103 copper contract finished the day 1.54% higher at 58,790 yuan/mt. Open interest fell 6,630 lots to 93,985 lots.

The US House of Representatives voted on Friday to pass the budget resolution approved by the Senate earlier, paving the way for Biden's $1.9 trillion stimulus package. US announced that the number of new nonfarm payrolls in January was far lower than expected, which also gave more reasons to support the upcoming relief bill. As a result, the US dollar index dropped significantly, and copper prices gained support instead. In addition, the governor of the Bank of England said that the central bank was doing the right thing by implementing a record low interest rate, and said that after the third pandemic prevention blockade was lifted, Britain might usher in a consumption boom. Under the expectation of future economic and consumption recovery, the fundamentals gave copper price some support.

China's social financing scale in January, and whether the contract can follow the LME copper to strengthen will come under scrutiny tonight.

Aluminium: The most-liquid SHFE 2103 aluminium contract finished the day 2.1% higher at 15,780 yuan/mt. Open interest fell 3,483 lots to 171,227 lots.

Zinc: The most-active SHFE 2103 zinc contract climbed to an intraday high of 20,310 yuan/mt and closed up 0.4% at 20,035 yuan/mt. Open interest rose 956 lots to 81,406 lots. The local clearing of the domestic COVID-19 cases boosted market confidence, and the positive news from the overseas stimulus bill boosted zinc prices. However, social stocks began to pile up due to the stagnation of pre-holiday consumption, and the contract has no further momentum in the near term. The pressure from the middle line of BOLL will be monitored. It is expected that zinc prices will fluctuate around 20,000 yuan/mt.

Nickel: The most-traded SHFE 2104 nickel contract ended the day 1.68% higher at 133,550 yuan/mt today. Open interest fell 5,467 lots to 158,211 lots. China's refined nickel output shrank 11.63% from December and 10.17% from a year earlier, to 13,000 mt in January.

Lead: The most-traded SHFE 2103 lead contract rose to an intraday high of 15,180 yuan/mt and ended the day 0.1% lower at 15,145 yuan/mt. Open interest fell 2,035 lots to 27,980 lots. The spot market has taken a holiday one after another. It is expected that the contract will maintain a high level and fluctuate within a narrow range in the last few trading days before the CNY.

Tin: The most-liquid SHFE 2104 tin contract fell to a session low of 164,170 yuan/mt and finished the day 1.59% higher at 163,550 yuan/mt today. Open interest rose 1,351 lots to 36,020 lots. The guidance of LME tin on the trend of the contract will be monitored. It is expected that the contract will keep fluctuating in the near term. Pressure above will be seen from 168,000 yuan/mt today. Support below will be seen from 163,000 yuan/mt today.