• 08/08/2022 9:05 pm

#SMM Morning Comments (Aug 11): Shanghai base metals weakened for the most part as investors monitor stimulus bill and US-China tensions

SHANGHAI, Aug 11 (SMM) —Shanghai base metals were broadly lower on Tuesday as investors eye US stimulus package and US-China tensions. Only copper rose nearly 1% as of 10:15 Beijing time, holding onto overnight gains. LME nonferrous metals were mixed and changes were less than 1%.

Shanghai nonferrous metals, except for copper and zinc, closed lower in overnight trading. Aluminium fell 1.11%, lead shed 0.34%, nickel declined 0.1% and tin weakened 0.23%, while copper rose 0.85% and zinc edged 0.03% higher.

Their counterparts on the LME traded mixed on Monday. Copper surged 2.63%, aluminium rose 1.34% and tin firmed 0.23%, while zinc weakened 0.31%, lead fell 0.73% and nickel declined 1.04%.

Copper: Three-month LME copper surged 2.63% to close at $6,401/mt on Monday. It is likely to trade between $6,340-6,400/mt today.

The most-traded SHFE 2009 contract ended 0.85% higher at 50,740 yuan/mt in overnight trading. It is expected to move between 50,400-50,900 yuan/mt today, while spot premiums are seen at 60-120 yuan/mt.

Aluminium: Three-month LME aluminium rose 1.34% to end at $1,783/mt on Monday. Open interest declined 2,494 lots to 799,000 lots as shorts reduced positions.

The most-active SHFE 2009 aluminium contract fell 1.11% to end at 14,290 yuan/mt in overnight trading on buildup of social inventories. SHFE aluminium is expected to move between 14,150-14,500 yuan/mt today, and spot premiums are seen at 60-80 yuan/mt against the September contract.

Zinc: Three-month LME zinc slumped to an intraday low of $2,356/mt in morning trading, before recouping the losses to hit a session-high of $2,402.5/mt and finishing the day 0.31% lower at $2,382/mt. Zinc stocks across LME warehouses built up 575 mt or 0.29% to 197,750 mt on Monday. Stronger US dollar and escalating US-China tensions deepened risk aversion sentiment. LME zinc is expected to move between $2,360-2,410/mt today.

The most-traded SHFE 2009 zinc contract edged 0.03% firmer to end at 19,350 yuan/mt in choppy trading, with support from the five-day moving average. Upbeat domestic economic data and continued declines in zinc social inventories bolstered zinc prices, but escalating US-China tensions limited its upward space. SHFE zinc is likely to fluctuate between 19,100-19,600 yuan/mt today, while spot premiums for domestic 0# Shuangyan are seen stable at 80-90 yuan/mt over the September contract.

Nickel: The most-liquid SHFE 2010 nickel contract closed 0.1% weaker at 113,650 yuan/mt in overnight trading. Rising US dollar index weighed on nickel prices.

Lead: Three-month LME lead fell 0.73% to close at $1,902.5/mt on Monday, posting a second-day decline.

The most-active SHFE lead contract ended 0.34% lower at 16,240 yuan/mt in overnight trading.

Tin: Three-month LME tin plunged to a session low of $17,625/mt after the opening bell, before regaining the ground and finishing the day 0.23% higher at $17,790/mt. LME tin stocks expanded 75 mt to 4,095 mt. Pressure above will be seen at around $17,900/mt today.

The most-active SHFE 2010 tin contract opened at a session-high of 145,800 yuan/mt last night, but fell immediately to fluctuate around 145,300 yuan/mt and later extended losses to a session low of 144,830 yuan/mt, before regaining some ground to close 0.23% lower at 145,440 yuan/mt in overnight trading. Support below is seen at around the 20-day moving average of 144,500 yuan/mt today.

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