SHANGHAI, Apr 14 (SMM) – LME and SHFE base metals closed mostly with gains last night. On the macro front, the U.S. dollar fell to a two-month low against a basket of currencies yesterday and a one-year low against the euro, as U.S. CPI data fell more than expected in March, boosting expectations that the Fed’s rate hike cycle is drawing to a close. The market needs to pay attention to retail sales data released on Friday to judge consumer spending.
Copper: LME copper prices closed at $9,071/mt overnight, a rise of 1.24%. Trading volumes were 20,000 lots and open interest stood at 252,000 lots. SHFE 2305 copper contract finished at 70,000 yuan/mt last evening, up 1.23%. Trading volume was 44,000 lots, and open interest stood at 177,000 lots.
In terms of fundamentals, due to the approaching delivery in the spot market and higher copper prices, downstream buying interest was weak. And the overall transaction was limited. In addition, the inflow of imported copper has decreased this week, and the impact on the spot market has weakened. At present, the guidance of the fundamentals for copper prices has weakened, the demand for end-user consumption is relatively weak. Many downstream processing enterprises are less sensitive to changes in copper prices, and only maintain on-demand purchases. End-user consumption is far behind the market expectations. The current fundamental impact is weakening, and the market is more affected by macro data. As the Fed is expected to end its interest rate hike, the pressure on copper prices has weakened.
Aluminium: Overnight, the most-traded SHFE 2305 aluminium contract prices opened at 18,630 yuan/mt, with its lowest and highest at 18,595 yuan/mt and 18,730 yuan/mt before closing at 18,690 yuan/mt, up 200 yuan/mt or 1.08%. LME aluminium opened at $2,330.5/mt on Thursday, with its high and low at $2,385/mt and $2,321/mt respectively before closing at $2,363/mt, an increase of $39/mt or 1.68%.
Expectations for US interest rate hike eased, sending the US dollar index lower. The domestic aluminium supply maintained a slight increase. Downstream operating rates rose only slightly this week. Aluminium ingot stocks are expected to drop further amid limited arrivals. On the whole, the short-term aluminium market is intertwined with positive and negative factors, which may keep aluminium prices rangebound. It is necessary to continue to pay attention to the power supply situation in Yunnan, inventory changes, and whether the Federal Reserve will raise interest rate.
Lead: Overnight, the LME opened at $2,123/mt and closed at $2,144/mt after hitting the lowest point at $2150/mt and the highest point at $2,150/mt, an increase of 18.5 yuan/mt, or 0.87%.
The most-traded SHFE 2305 lead contract opened at 15,290 yuan/mt and finally closed at 15,295 yuan/mt after hitting the lowest point at 15,245 yuan/mt and the highest point at $15,310 yuan/mt, down 25 yuan/mt, or 0.16%.
Zinc: LME zinc opened at $2,790.5/mt at last night’s session, hitting a low of $2,767/mt and a high of $2,864/mt, and closed at $2,850.5/mt, up $64/mt or 2.3%. Trading volume rose to 6,568 lots, and open interest added 294 lots to 177,000 lots. LME zinc inventory decreased by 475 mt or 1.06% to 44,200 mt. The US March PPI released last night hit the lowest level since April 2020, which reinforced the hopes for the Fed’s rate to peak. As a result, the US dollar dropped and LME zinc prices climbed.
Overnight, the most-traded SHFE 2305 zinc contract opened higher at 22,220 yuan/mt, hitting a low of 22,180 yuan/mt and a high of 22,360 yuan/mt, and closed at 22,305 yuan/mt, up 295 yuan/mt or 1.34%. Trading volume was down to 62,034 lots, and open interest shed 3,936 lots to 103,000 lots. The non-ferrous metal prices rose across the board on weakening dollar that was weighed down by overseas inflation data. SHFE zinc prices are expected to grow with a decline in social inventory.
Nickel：Near the delivery of the SHFE 2304 contract, most traders included the NORNICKEL nickel spot in their warrant delivery, hence the premiums stood firm. The suppliers of Jinchuan nickel were much more willing to ship, dragging down the premiums. NPI plants held their prices firm. Recently, the transactions between traders and NPI plants have increased. Market players generally remained bullish. On the demand side, according to SMM research, the spot stainless steel transactions became sluggish yesterday, and the premiums dropped slightly amid falling futures prices. SMM expects the spot stainless steel prices to be stable with some drops in the short term. Nickel prices still bear pressure from the macro front, and SMM presumes that the prices will move rangebound.
[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.]
