SMM Evening Comments (Oct 30): Shanghai nonferrous metals declined for the most part, aluminium advanced 0.07%

SHANGHAI, Oct 29 (SMM) – SHFE nonferrous metals broadly fell on Friday October 30 following an overnight bounce on Wall Street on the back of better-than-expected U.S. economic data.

In coronavirus developments, Moderna said Thursday it is prepping for the global launch of its potential coronavirus vaccine. That comes amid a rise in cases in the U.S. as well as Europe, with Germany and France announcing new nationwide lockdowns.

Shanghai nonferrous metals, except for aluminium, traded lower on Friday October 3. Nickel dropped 3.65% to lead the losses, zinc shed 0.41%, tin declined 0.36%, lead weakened 0.45% and copper fell 0.84%, while aluminium advanced 0.07%.

The ferrous complex rose across the board. Iron ore increased 2.12%, rebar rose 1.09%, and hot-rolled coil climbed 0.68%.

Copper: The most-traded SHFE 2012 copper contract finished the day 0.84% lower at 50,940 yuan/mt. Open interest rose 3,636 lots to 116,208 lots.  Global risk assets plummeted amid pessimistic sentiment and A shares plunged by 1.5%, affecting a wide range. The COVID-19 situation in Europe continues to hit a new high, and it is difficult for the European economy to grow substantially in the near term, which is beneficial to the US dollar to a certain extent. As a safe-haven asset, the dollar rose significantly, approaching 94. Next week, it will officially enter the final process of the US election. The market is full of uncertainty for the macro market, and the risk aversion continues to ferment, with a large number of traders leaving the market. US Personal Consumption Expenditures Price Index in September and US election news will come under scrutiny tonight.

Aluminium: The most-liquid SHFE 2012 aluminium contract climbed to an intraday high of 14,775 yuan/mt after opening and finished the day 0.07% higher at 14,370 yuan/mt. Open interest rose 4,149 lots to 106,264 lots. The contract still has upward room.

Zinc: The most-active SHFE 2012 zinc contract closed down 0.41% at 19,580 yuan/mt. Open interest fell 5,666 lots to 92,063 lots. Affected by the blockade plan proposed by various countries under the outbreak of the European pandemic, the market is worried that consumption will once again stagnate. On the other hand, Europe and the US have not proposed further fiscal stimulus bills, which cast a shadow over the economic recovery again. The contract is expected to keep fluctuating in the near term.

Nickel: The most-traded SHFE 2012 nickel contract ended the day 3.65% lower at 116,980 yuan/mt today. Open interest fell 24,440 lots to 86,461 lots. Nickel ore inventories across all Chinese ports increased 34,000 wmt from October 23 to 9.42 million wmt as of October 30, showed SMM data.

Lead: The most-traded SHFE 2012 lead contract fell to an intraday low of 14,285 yuan/mt in afternoon trading and ended the day 0.45% lower at 14,380 yuan/mt. Open interest fell 1,944 lots to 28,769 lots. The reduction of fundamental secondary lead is expanding, and the prices of battery scrap are unlikely to drop, supporting lead prices to some extent, but tepid consumption is unlikely to provide further upward momentum for SHFE lead. The contract is expected to fluctuate sideways. The impact of next week's US presidential election should be monitored. Whether the contract could move above 14,400 yuan/mt will come under scrutiny tonight.

Tin: The most-liquid SHFE 2101 tin contract climbed to a session high of 144,070 yuan/mt and finished the day 0.36% lower at 142,720 yuan/mt today. Open interest fell 26 lots to 29,086 lots. The market risk aversion warmed up before the US election, and the support of the US dollar led to the decline of LME tin, and the SHFE tin was under pressure. The contract is expected to keep fluctuating at low in the near term. Pressure below is expected to around 140,000 yuan/mt.