SMM Morning Comments (May 18): Nonferrous metals on both LME and SHFE rose across the board

SHANGHAI, Mar 18 (SMM) — Nonferrous metals on both SHFE and LME advanced across the board on Tuesday morning.

Shanghai base metals all closed higher in overnight trading. Copper rose 0.76%, zinc surged 3.18%, aluminium added 0.71%, nickel jumped 1.9%, lead advanced 1.29% and tin went up 1.16%.

The LME complex performed similarly on Monday. Copper rose 1.3%, aluminium increased 2.04%, zinc went up 3.15%, lead added 2.32%, nickel jumped 1.7% and tin gained 1.99%.

Copper: Three-month LME copper rose 1.3% to end at $10,367/mt on Monday, and is likely to trade between $10,330-10,410/mt today.

The most-active SHFE 2106 copper contract went up 0.67% to close at 75,200 yuan/mt in overnight trading, and it is expected to move between 75,100-75,700 yuan/mt today, while spot premiums will be seen at 150–80 yuan/mt.

Overnight, US economic data showed that the manufacturing industry in New York State maintained steady expansion in May, and the price index reached a record high, while the confidence of residential builders remained stable. In addition, Clarida, vice chairman of the Federal Reserve, said that when the economy has not yet reached the plan that the Federal Reserve can reduce the size of its bonds, the US dollar index fell under pressure, which benefited copper prices. On fundamentals, the strike of Chile copper mine brought supply worries to the market and boosted copper futures to a certain extent.

Aluminium: Three-month LME aluminium fell 0.2% to close at $2,496/mt on Monday. It is expected to trade between $2,450-2,550/mt today.

The most-liquid SHFE 2106 aluminium contract rose 0.33% to settle at 19,765 yuan/mt on Monday night, and is likely to trade between 19,700-20,000 yuan/mt today. It is expected that SHFE aluminium will continue to be strong today. Under the pressure of continuous destocking brought about by the peak consumption season, the contract will try to continue to repair the recent decline.

Zinc: Three-month LME zinc rose 3.15% to close at $3,030.5/mt on Monday. Zinc stocks at LME-listed warehouses fell 200 mt to 286,950 mt. Overnight, the vice chairman of the Federal Reserve reiterated that it was not yet time to discuss code reduction and easing, which boosted market sentiment and led to the rise of LME zinc. However, the US manufacturing survey showed that prices were at a record high, and inflation concerns remained. The minutes of the Federal Reserve's April monetary policy meeting will be monitored in the near term. The contract is likely to trade between $3,000-3,050/mt today.

The most-liquid SHFE 2106 zinc contract rose 3.18% to end at 22,895 yuan/mt in overnight trading. Macro guidelines will be monitored tonight. The SHFE zinc contract is expected to move between 22,500-23,000 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be seen higher at 10-30 yuan/mt.

Nickel: The most-active SHFE 2106 nickel contract rose 1.9% to close at 132,780 yuan/mt on Monday. Open interests fell 2,953 lots to 116,000 lots. The operation of the contract under the pressure of 134,000 yuan/mt will be monitored today.

Lead: Three-month LME lead settled 2.32% higher at $2,156/mt on Monday. Whether the contract could continue the long position market and stand back to the five-day moving average will be monitored today.

The most-active SHFE 2106 lead contract went up 1.29% to close at 15,305 yuan/mt on Monday night. The release of accumulated pressure of spot lead ingots, macro benefits and tight supply of raw materials such as lead concentrate still affected the contract. Whether the contract could continue to go up and break through the pressure level of the five-day moving average will be monitored today.

Tin: Three-month LME tin closed up 1.99% at $29,950/mt on Monday. The US dollar index fell slightly yesterday, as the US manufacturing survey showed record high prices, which aggravated inflation concerns. The minutes of the Federal Reserve monetary policy meeting in April should be monitored. Supported by the weak trend of the US dollar and the shortage of goods in China's spot market, the contract once again approached $30,000/mt, which is expected to fluctuate strongly in the near term. Pressure above will be seen from $30,000 /mt today. Support below will be seen from $29,000/mt today.

The most-liquid SHFE 2107 tin contract rose 0.9% to close at 199,200 yuan/mt on Monday night. The tight domestic spot circulation supported the trend of tin prices. Pressure above will be seen from 200,000 yuan/mt today. Support below will be seen from 190,000 yuan/mt today.