SMM Morning Comments (Dec 28): Shanghai Base Metals Boosted by Falling US Dollar Index_SMM

SHANGHAI, Dec.28 (SMM) – Base metals in Shanghai were boosted by the drop in the US dollar index overnight. The LME market is closed from December 27 to 29.

SHFE copper increased by 1.59%, aluminum by 0.79%, lead by 0.65%, zinc by 0.81% and nickel by 1,560 yuan / mt.

The copper: The SHFE 2202 copper contract opened at 69,810 yuan / mt last night, reaching 69,920 yuan / mt in trade, and closed at 70,860 yuan / mt, up 1.59% day-to-day. the following day. The trading volume was 41,000 lots and open interest was 146,000 lots. SHFE copper is expected to trade today between 70,400 and 71,000 yuan / tonne, with spot prices ranging from a discount of 120 yuan / tonne to a premium of 10 yuan / tonne.

The US dollar index has tended to decline amid the spread of the Omicron COVID-19 variant around the world, which has boosted copper futures. Oil prices surged overnight, also giving copper futures a boost.

In the spot market, most companies suspended their accounting with only 4 trading days before the New Year, and trading in the market was scarce. Transactions should be stifled in the coming days.

Aluminum: The national social stock of aluminum ingots has been declining for almost two consecutive months, and it is expected that the destocking cycle may still be sustained in the short term. SHFE aluminum is unlikely to show a clear direction in a context of weakening cost support and continued destocking of national social stocks. The most traded SHFE aluminum contract is expected to move in a range of 19,700 to 20,000 yuan / t on Tuesday.

Lead: The most liquid SHFE 2202 main contract opened at 15,435 yuan / mt and peaked at 15,510 yuan / mt on Monday evening, before closing at 15,480 yuan / mt, up 0.65% , with open interest decreasing from 190 lots to 43,129 lots.

Zinc: Overnight, the most traded SHFE 2202 zinc contract opened at 24,050 yuan / mt, and edged down to 23,845 yuan / mt, but then hit a high of 24,230 yuan / mt. The contract closed at 24,150 yuan / mt, up 195 yuan / mt or 0.81%. Trading volume was 78,705 lots and open interest decreased from 966 lots to 103,000 lots.

On the supply side, due to the pandemic in Manzhouli, the import of zinc ore from Russia and Mongolia by foundries in Inner Mongolia was hampered and a large amount of goods piled up in the border, which led some foundries to lower MOTs in November. Zinc prices are currently heavily affected by energy issues overseas and are expected to continue to fluctuate within a narrow range. The most traded SHFE zinc contract is expected to move in the 23,800 to 24,300 yuan / tonne range today. 0 # Shuangyan domestic zinc can trade at premiums of 10-20 yuan / mt against the SHFE 2201 zinc contract.

Nickel: SHFE nickel prices closed at 149,460 yuan / mt, an increase of 1,560 yuan / mt from the previous trading day’s closing price. Trading volumes decreased from 182,000 lots to 109,000 lots, and open interest decreased from 2,000 lots to 153,000 lots. Overall, the fundamentals of nickel haven’t changed much. Demand from the two main downstream consumers, nickel sulphate and stainless steel, is expected to remain weak and nickel prices are under some pressure. The LME market was closed on Monday and will be closed on Tuesday for the Christmas holidays. The market will pay particular attention to fluctuations in the prices of SHFE nickel induced by capital flows.

Tin: Overnight, the SHFE 2202 tin contract hovered around 290,000 yuan / t after a higher opening. The stock of SHFE tin warrants decreased slightly. Transactions were poor in the spot market.

SHFE tin is expected to hover sideways amid a stable spot market.

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