Home / Metal News / Copper / SMM Morning Comments (Mar 3): Shanghai base metals rose across the board as US bond yields stabilised
SMM Morning Comments (Mar 3): Shanghai base metals rose across the board as US bond yields stabilised
Mar 3,2021 10:00CST
SMM Comments
Source:SMM
Nonferrous metals on both SHFE and LME advanced across the board on Wednesday morning.

SHANGHAI, Mar 3 (SMM) — Nonferrous metals on both SHFE and LME advanced across the board on Wednesday morning.

China’s services sector had its worst month on record in February as new orders plummeted to their lowest level since the global financial crisis, a business survey showed on Wednesday, with economists urging swift support to avoid mass bankruptcies.

Shanghai base metals all closed higher in overnight trading. Copper rose 1.87%, aluminium surged 3.19%, zinc added 2.09%, nickel jumped 0.78%, lead advanced 0.62% and tin soared 2.77%.

The LME complex performed similarly on Wednesday. Copper rose 2.57%, aluminium increased 4.46%, zinc went up 1.21%, lead added 0.14%, nickel jumped 0.23% and tin gained 4.13%.

Copper: Three-month LME copper rose 2.72% to end at $9,276.5/mt on Tuesday, and is likely to trade between $9,230-9,320/mt today.

The most-active SHFE 2104 copper contract went up 1.74% to close at 67,940 yuan/mt in overnight trading, and it is expected to move between 67,700-68,300 yuan/mt today, while spot premiums will be seen at 60-20 yuan/mt.

It is reported that OPEC+ is expected to pass the resolution of increasing production at this Thursday's meeting, and WTI crude oil futures immediately fell below US$ 60, but the fluctuation of oil prices at night had limited impact on copper futures. On the other hand, US Senate Majority Leader Schumer said that the Senate started to protest the relief proposal as early as Wednesday, and the market was full of optimism. This week, the yield of US debt tended to be stable, and the US dollar index turned down at night, while copper futures were boosted and increased significantly. On the spot side, with the active trading under long-term contracts and the increasing number of downstream processing enterprises entering the market, the market was active, and the turnover was significantly improved compared with last week.

Zinc: Three-month LME zinc rose 2.08% to close at $2,850/mt on Tuesday. Overnight, US dollar kept rising, and the market anxiety still put pressure on nonferrous metals, and the room for further increase was suppressed. LME zinc market lacks significant positive news recently, and the Senate deliberation of the US stimulus bill will still be monitored in the near term. The contract is likely to trade between $2,820-2,870/mt today.

The most-liquid SHFE 2104 zinc contract rose 0.9% to end at 21,755 yuan/mt in overnight trading. Overnight, the rise of LME zinc drove SHFE zinc to move upwards. However, the weak domestic manufacturing data in February put pressure on nonferrous metals. At present, the domestic downstream still mainly digested inventories, and received less goods at high prices, thus putting pressure on the domestic zinc ingot market. Under the stable expected environment in the future in China, the contract is expected to still fluctuate strongly by 21,000 yuan/mt in the near term. This year's economic goals and the 14th Five-Year Plan will be monitored in the near term. The SHFE zinc contract is expected to move between 21,400-21,900 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be seen higher at 70-90 yuan/mt.

Nickel: The most-active SHFE 2104 nickel contract rose 0.78% to close at 139,080 yuan/mt on Tuesday. Open interests rose 474 lots to 109,000 lots. The pressure from 140,000 yuan/mt will be monitored today.

Lead: Three-month LME lead settled 0.39% higher at $2,075/mt on Tuesday. The US dollar index fluctuated and moved downward during the European trading period, and the US manufacturing PMI data in February was positive, which boosted the general increase of LME base metals and stabilised the 40-day moving average. Whether LME Lead continued to challenge the 5-day moving average of $2,100/mt will be monitored today.

The most-active SHFE 2104 lead contract went up 0.62% to close at 15,395 yuan/mt on Tuesday night. Whether the contract could move above 20-day moving average will be monitored today.

Tin: Three-month LME tin closed up 3.54% at $24,430/mt on Tuesday. Yesterday, the US dollar index fell 0.27% to 90.77, hitting a three-week high of 91.39 earlier. When the yield rose, market participants were worried that the economic recovery from the impact of the COVID-10, coupled with fiscal stimulus, will lead to a sharp rise in inflation, and may make the Federal Reserve tighten monetary policy faster. As investors cleared short positions in the US dollar, market fluctuations also boosted the US dollar. After the market experienced a big rise and fall, the competition between long positions and short positions intensified, and the short-term trend amplitude may expand. Pressure above will be seen from $25,500 /mt today. Support below will be seen from $23,000/mt today.

The most-liquid SHFE 2104 tin contract rose 2.31% at 181,210 yuan/mt on Tuesday night. The guidance of LME tin on the trend of SHFE tin will be monitored in the near term. Pressure above will be seen from 184,500 yuan/mt today. Support below will be seen from 170,000 yuan/mt today.

Market commentary
Copper
Aluminium
Zinc
Nickel
Lead
Tin

For queries, please contact Frank LIU at liuxiaolei@smm.cn

For more information on how to access our research reports, please email service.en@smm.cn

Related news