SMM Evening Comments (Dec 3): Shanghai nonferrous metals fell across the board

SHANGHAI, Dec 3 (SMM) – SHFE nonferrous metals broadly fell on Thursday December 3 as investors reacted to the release of a private survey on China's services sector activity in November.

Aluminium led the losses and slumped 3.86%, copper slipped 0.87%, zinc eased 1.15%, lead lost 1.98%, tin went down 0.3% and nickel decreased 2.04%.

The ferrous complex closed mixed. Hot-rolled coil decreased 0.21%, rebar slipped 1.23%, while Iron ore rose 1.68%.

Copper: The most-traded SHFE 2101 copper contract rose to an intraday high of 57,330 yuan/mt in afternoon trading and finished the day 0.21% lower at 56,870 yuan/mt. Open interest fell 5,923 lots to 130,000 lots.

Last night, the US announced that ADP Employment Change in November was far less than expectations. The continued spread of the pandemic caused far more damage to the economy than expected. Large-scale employment loss continued, and the market still had reservations about the speed of economic recovery.

US Initial Jobless Claims in the week ended November 28 and whether the contract could move above 57000 yuan/mt will come under scrutiny tonight.

Aluminium: The most-liquid SHFE 2101 aluminium contract slid to a session low of 16,130 yuan/mt in afternoon trading and finished the day 3.86% higher at 16,170 yuan/mt. Open interest fell 13,193 lots to 145,883 lots. It is expected that the contract will have a limited downward room due to relatively low inventories.

Zinc: The most-active SHFE 2101 zinc contract closed down 1.15% at 21,015 yuan/mt. Open interest fell 5,034 lots to 89,059 lots. The contract is expected to keep fluctuating at high in the near term.

Nickel: The most-traded SHFE 2102 nickel contract ended the day 2.04% lower at 117,550 yuan/mt today. Open interest rose 348 lots to 151,680 lots.

Lead: The most-traded SHFE 2101 lead contract fell to an intraday low of 14,820 yuan/mt and ended the day 1.98% lower at 14,845 yuan/mt. Open interest fell 2,435 lots to 37,313 lots. The contract fell for three consecutive days. On the fundamentals, downstream is restocking at low prices and trade has improved slightly. It is hard to restock battery scrap at low prices, and the cost of secondary lead is likely to provide certain support. Whether the contract could remain above 20-day moving average of 14,800 yuan/mt will be monitored tonight.

Tin: The most-liquid SHFE 2101 tin contract climbed to a session high of 146,570 yuan/mt and finished the day 0.3% lower at 145,900 yuan/mt today. Open interest rose 1,069 lots to 27,280 lots. Support below is expected to around 145,000 yuan/mt. The contract is expected to keep fluctuating in the near term.