SHANGHAI, Apr 11 (SMM) - SHFE base metals closed mostly with losses last night. On the macro front, the US employment report released last Friday was mixed, which strengthened the expectation of a 25 basis point rate hike in the US in May. The US dollar index strengthened overnight, weighing on copper prices.
Copper: The LME was closed on Monday due to the Easter holiday. SHFE 2305 copper contract finished at 68,460 yuan/mt last night, down 0.45%. Trading volume was 23,000 lots, and open interest stood at 163,000 lots.
On the fundamentals, as of Monday April 10, SMM copper inventory across major Chinese markets fell 7,600 mt from last Friday to 194,700 mt, up 59,400 mt YoY. Specifically, the decline in inventories in east China and south China was mainly due to the downstream stockpiling in the middle of last week when copper prices fell below 69,000 yuan/mt. In addition, shipments arrivals were relatively small. It is expected that imported copper will still flow in this week, but it will be less than last week. In terms of prices, the market will wait for the minutes of the Federal Reserve meeting. Consumer demand will give some support for copper prices. It is expected that copper prices will remain range-bound at highs.
Aluminium: At Monday’s night session, the most-traded SHFE 2305 aluminium contract opened at 18,605 yuan/mt, with its lowest and highest at 18,570 yuan/mt and 18,645 yuan/mt before closing at 18,620 yuan/mt, up 5 yuan/mt or 0.03%. The LME was closed on Monday for Easter holiday.
On the macro level, US Federal Reserve officials repeatedly sent hawkish signals, growing market expectations for the Fed to raise interest rates. In terms of fundamentals, the domestic aluminium supply will maintain a slow upward trend in the second quarter. The demand is gradually picking up, and aluminium ingot social inventory has maintained a destocking cycle. With supply and demand both growing, coupled with macro headwinds, the short-term aluminium prices may move rangebound. It is necessary to pay attention to power supply situation in Yunnan and the pace of interest rate hikes by the Federal Reserve.
Lead: Overnight, the London Metal Exchange was closed for Easter.
Overnight, the most-traded SHFE 2305 contract opened at 15,290 yuan/mt and hit the lowest point at 15,255 yuan/mt, but then rebounded and finally closed at 15,285 yuan/mt, down 15 yuan/mt or 0.01%.
Zinc: The LME was closed on Monday due to Easter.
Overnight, the most-traded SHFE 2305 zinc contract opened at 22,120 yuan/mt and closed at 22,135 yuan/mt, down 120 yuan/mt or 0.54%. Trading volume was reduced to 23,458 lots, and open interest lost 916 lots to 104,000 lots.
According to SMM data, zinc ingot social inventory across seven markets in China rose slightly to 150,000 mt as of April 10. At the same time, the poor ferrous metal prices and high inventory of galvanised zinc weighed down the operating rates of galvanising plants. The longs are still suppressed by macro sentiment, and SHFE zinc prices will remain rangebound.
Nickel：The spread between the SHFE front-month and next-month contracts did not narrow yesterday. The prices of NORNICKEL nickel hovered at highs despite the drop in futures prices in the early trading. The NPI market was still in a supply surplus. Some domestic NPI factories carried high in-plant finished product inventories, and so did the traders.
On the demand side, according to SMM research, driven by the rebound in the futures prices last Friday, the spot stainless steel transactions in Wuxi improved. However, the transactions decreased yesterday on the falling futures prices in the early trading, and the spot prices dropped slightly. Recently, the pure nickel demand from the alloy sector has picked up slightly. In general, pure nickel demand grew slightly. SMM presumes that nickel prices are less likely to fall.
[Disclaimer: The above representation and data is based on market information SMM believes to be reliable at the time of acquiring as well as the comprehensive assessment by SMM research team, and any and all information provided in this article is for reference only. This article does not constitute a direct recommendation for investment or any decisions in any form and clients shall act on their own discreet and any decisions made by clients are not within the responsibility of SMM.]
