SMM Evening Comments (Dec 9): Shanghai nonferrous metals closed mostly higher, aluminium fell 1.12%

SHANGHAI, Dec 9 (SMM) – SHFE nonferrous metals rose for the most part on Wednesday December 9 as a coronavirus vaccine rollout commenced in the U.K., fueling some of the optimism among investors.

Data showed China’s consumer price index fell in November for the first time in about a decade as food prices declined.

Zinc, the best performer, rose 1.08%, lead advanced 0.93%, nickel went up 0.48%, copper climbed 0.39% and tin gained 0.15%, while aluminium dropped 1.12%.

The ferrous complex closed mixed. Rebar advanced 1.55%, hot-rolled coil rose 1.4%, while iron ore remained unchanged.

Copper: The most-traded SHFE 2101 copper contract finished the day 0.39% higher at 57,250 yuan/mt. Open interest fell 1,018 lots to 114,000 lots.

The White House proposed a new stimulus plan of US$ 916 billion to the Democratic Party to break the deadlock that lasted for several months. The market is optimistic that the stimulus bill will be reached in the following weeks. In addition, the British Prime Minister will meet with the President of the European Commission on Wednesday to push forward the Brexit trade negotiations. The total number of cases in COVID-19 exceeded 15 million, and Biden promised to distribute 100 million doses of vaccine within 100 days to reverse the pandemic. The US dollar index continued to fall to around 90.7, which also supported copper prices.

The trend of LME copper, and the progress of stimulus bill and whether the contract could maintain its upward trend will come under scrutiny tonight.

Aluminium: The most-liquid SHFE 2101 aluminium contract finished the day 1.12% lower at 15,955 yuan/mt. Open interest fell 180 lots to 132,579 lots.

Zinc: The most-active SHFE 2101 zinc contract closed up 1.08% at 21,455 yuan/mt. Open interest rose 3,033 lots to 95,084 lots. The export orders surged, which led to the consumption of zinc at the end of the year, and the consumption of zinc ingots in the off-season exceeded the expected performance, which led to the decline in social stocks. It is expected that the contract will have further upward momentum tonight, and macro sentiment disturbance will be monitored.

Nickel: The most-traded SHFE 2102 nickel contract ended the day 0.48% higher at 121,690 yuan/mt today. Open interest fell 3,212 lots to 145,757 lots.

Lead: The most-traded SHFE 2101 lead contract rose to an intraday high of 15,230 yuan/mt and ended the day 0.93% higher at 15,130 yuan/mt. Open interest fell 668 lots to 31,228 lots. The good news of overseas vaccines boosted commodity prices, and LME Lead showed a robust trend. Whether long positions can enter again to boost the contract to remain above 10-day moving average will be monitored tonight.

Tin: The most-liquid SHFE 2102 tin contract climbed to a session high of 150,550 yuan/mt and finished the day 0.09% higher at 149,540 yuan/mt today. Open interest rose 381 lots to 30,670 lots. Whether the contract could move above 150,000 yuan/mt will be monitored.