SHANGHAI, Dec 31 (SMM) – Shanghai base metals mostly trended higher on Friday morning following the rebounding US PMI and low weekly initial jobless claims. Meanwhile, their counterparts mostly trended lower.
LME base metals mostly closed with gains in the trading on Thursday. Copper fell 0.64%, aluminium increased 0.11%, lead rose 0.37%, and zinc went up 0.54%.
SHFE base metals rose across the board overnight. Copper rose 0.46%, aluminium increased 0.89%, lead gained 0.29%, zinc won 1.08%, and nickel advanced 0.8%.
Copper: Three-month LME copper opened at $9,660/mt last night, hitting the highest and lowest levels at $9,708.5/mt and $9,611/mt respectively, and closed at $9,613/mt, down 0.64%. The trading volume was 7,439 lots, and the open interest stood at 251,000 lots. Three-month LME copper is expected to trade between $9,580-9,680/mt today.
The SHFE 2202 copper contract opened at 70,200 yuan/mt last night, falling to the lowest point at 70,030 yuan/mt and then rebounding to 70,400 yuan/mt. It closed at 70,340 yuan/mt, up 0.46%. The trading volume was 25,000 lots, and the open interest was 138,000 lots. SHFE copper is expected to trade between 69,700-70,300 yuan/mt today, with spot prices between a discount of 20 yuan/mt and a premium of 90 yuan/mt.
The December Chicago PMI released yesterday rose to 63.1 again after falling last month, and weekly initial jobless claims unexpectedly fell to a 52-year low. The copper prices remain rangebound amid bullish sentiments and worsening COVID-19 pandemic. The market transactions continued to drop at the end of the year, and the spot prices fluctuated around 70,000 yuan/mt. The goods holders were more willing to sell as some goods flowed into the market, and the premiums declined. If the inventory continues to stand low, the buyers may still make transactions at discounts.
Aluminium: LME aluminium opened at $2,813.5/mt on Thursday and closed at $2,815/mt, an increase of $3/mt or 0.11%.
The most-traded SHFE 2202 aluminium contract opened at 20,455 yuan/mt overnight, with the highest and lowest prices at 20,525 yuan/mt and 20,375 yuan/mt before closing at 20,450 yuan/mt, up 180 yuan/mt or 0.89%.
Natural gas shortage in Europe led to soaring natural gas and electricity prices. Alcoa will suspend aluminium production at its Spanish smelter for two years to cope with the recent surge in energy prices in Europe. There are frequent news of overseas production reductions. China released the "Development Plan for Raw Materials Industry in the 14th Five-Year Plan Period" yesterday, which proposes measures to reduce emissions and restrict new capacity for industrial materials such as aluminium and alumina. The supply disruptions in the domestic and overseas markets increased market concerns about supply. The SHFE 2202 aluminium contract is expected to move at 19,800-20,500 yuan/mt on Friday, and the spot discounts may narrow.
Lead: Three-month LME lead opened at $2,286/mt last night. The overseas inventory continued to drop slightly, and the non-farm payrolls were higher than expected. Most metals prices moved upward. LME lead rose and hit $2,300/mt, but failed to stand above the 60-day moving average. It closed at $2,286.5/mt, up 0.37%.
The most-liquid SHFE 2202 lead contract opened at 15,390 yuan/mt last night and fluctuated around 15,400 yuan/mt, before closing 0.29% higher at 15,390 yuan/mt, with open interest decreasing 3,793 lots to 34,776 lots.
Zinc: Three-month LME zinc rose 0.54% to settle at $3,522.5/mt overnight, with open interest increasing 3,792 lots to 251,000 lots. LME stocks across LME-listed warehouses fell by 3,225 mt or 1.59% to 199,750 mt. LME inventory continued to decline and the Nord Stream 2 plan issues may not be solved. The cost pressure of the smelters supports to LME zinc. LME zinc is expected to move between $3,480-3,530/mt.
The most-liquid SHFE 2202 zinc contract rose 1.08% to settle at 24,424 yuan/mt, with open interest decreasing by 814 lots to 96,964 lots. The shipments from some smelters slowed due to transportation restrictions born from COVID-19 pandemic, but the overall impact was limited. The most-traded SHFE zinc contract is expected to move between 24,000-24,500 yuan/mt today, and spot premiums for domestic #0 Shuangyan will be seen at 120-140 yuan/mt over the January contract.
Nickel: SHFE nickel prices closed at 151,870 yuan/mt in overnight trading, up 1,420 yuan/mt or 0.8%. Trading volumes decreased 177,000 to 110,000 lots, and open interest stood at 152,000 lots. There will be no evening trading session today due to the New Year’s Day.
Tin: The SHFE 2202 tin contract trended lower overnight before hovering sideways with the exit of capital. It is expected that the SHFE 2202 tin contract will continue to fluctuate at highs. The SHFE tin warrants continued to decline. Some sellers in the spot market sold at discounts, but sales remained poor.
