SMM Evening Comments (Apr 13): Shanghai nonferrous metals declined for the most part, aluminium advanced 1.87%

SHANGHAI, Apr 13 (SMM) – SHFE nonferrous metals broadly fell on Tuesday April 13 following a muted finish overnight on Wall Street.

Shanghai nonferrous metals, except for aluminium, traded lower on Tuesday April 13. Tin dropped 2.23% to lead the losses, copper shed 0.29%, lead declined 0.07%, zinc went down 1.82% and nickel fell 2.23%, while aluminium advanced 1.87%.

A total of 84 vessels carrying 13.2 million mt of iron ore arrived at major Chinese ports during April 4-10, SMM estimates. This was up 1.18 million mt from the previous week, and down 630,000 mt from the same period last year.

The ferrous complex rose across the board. Iron ore increased 3.28%, rebar rose 2.36%, and hot-rolled coil climbed 2.17%.

Copper: The most-traded SHFE 2106 copper contract finished the day 0.35% lower at 65,930 yuan/mt. Open interest rose 1,292 lots to 129,000 lots.

US Treasury Secretary Yellen does not intend to list China as a currency manipulator in the semi-annual foreign exchange report released on Thursday. This move will make the US avoid new conflicts with China and the market sentiment will warm up slightly. However, the president of St. Louis Fed said that 75% of COVID-19 vaccination rate will be one of the prerequisites for the Fed to discuss reducing the bond purchase plan. Although there is still a certain way to go before the vaccination rate of 75%, the market has once again heard the voice of reducing debt purchase and gradually withdrawing from quantitative easing. Both long and short position sides are still cautious.

China trade account for March and US CPI annual rate for March will continue to be monitored tonight.

Aluminium: The most-liquid SHFE 2105 aluminium contract finished the day 1.98% higher at 17,740 yuan/mt. Open interest fell 13,554 lots to 192,000 lots. The contract is likely to trade between 17,400-17,900 yuan/mt tonight.

Zinc: The most-active SHFE 2105 zinc contract closed down 1.82% at 21,350 yuan/mt. Open interest rose 702 lots to 69,517 lots. 30,400 mt of LME zinc were delivered in a centralised warehouse, and the hidden inventories became more obvious. Moreover, the domestic market had poor expectations for zinc ingot consumption in April. However, the spot market consumption recovered, and the downstream restocking at low prices supported zinc prices. The lower edge of BOLL line will be monitored tonight.

Nickel: The most-traded SHFE 2106 nickel contract ended the day 2.23% lower at 121,720 yuan/mt today. Open interest rose 1,975 lots to 160,607 lots.

Lead: The most-traded SHFE 2105 lead contract rose to an intraday high of 14,835 yuan/mt and ended the day 0.07% lower at 14,790 yuan/mt. Open interest rose 2,203 lots to 51,867 lots. Trading in the spot market was still tepid. Whether the contract could stand firm above 14,700 yuan/mt will be monitored tonight.

Tin: The most-liquid SHFE 2106 tin contract fell to a session low of 176,230 yuan/mt and finished the day 0.12% lower at 177,970 yuan/mt today. Open interest fell 170 lots to 31,160 lots. Less-than- expected consumption and slow decline in inventories put pressure on the contract. The contract is expected to test pressure from 40-day moving average in the near term. Pressure above will be seen from 183,000 yuan/mt today. Support below will be seen from 177,000 yuan/mt today.