SMM Morning Comment For SHFE Base Metals On Apr 24

SHANGHAI, Apr 24 (SMM) –

Copper

LME copper prices opened at $9672.5/mt and closed at $9728/mt overnight, down 1.27%, with the highest of $9735/mt and the lowest of $9627/mt. The trading volume was 28,000 lots, and open interest stood at 335,000 lots. The most active SHFE 2102 contract prices opened at 77930 yuan/mt and finished at 78630 yuan/mt overnight, down 0.29%, with the low-end of 77650 yuan/mt and the high-end of 78650 yuan/mt. Trading volume was 80,000 lots and open interest stood at 196,000 lots. On the macro level, copper prices have retreated due to recent profit-taking and Iran's recent contacts with the United States to seek to resume negotiations on the implementation of the Iran nuclear agreement. The tension in geopolitical conflicts has eased to some extent. In terms of fundamentals, from the supply side, there were fewer arrivals this week and the supply increase was limited. In terms of consumption, copper prices fell sharply yesterday, leading to an increase in downstream consumption but to a limited extent. If copper prices continue to fall, consumption is expected to continue to pick up. On the whole, the capital level is still relatively strong, but the initial value of the US manufacturing PMI in April was 49.4, a four-month low, which is bullish for copper prices. It is expected that copper prices will remain relatively strong.

Aluminum

Overnight, the most-traded SHFE 2406 aluminum contract opened at 20,000 yuan/mt, with high and low at 20,175 yuan/mt and 19,960 yuan/mt before closing at 20,125 yuan/mt, down 250 yuan/mt or 1.23 %. LME aluminum opened at $2,661.5/mt yesterday, with its high and low at $2,669.5/mt and $2,562.5/mt respectively before closing at $2,576/mt, down $82/mt or 3.09%.

On the macro front, the market is waiting for the US Personal Consumption Expenditure (PCE) price index report to be released on Friday for clues on the prospects for US interest rate cuts. Risky assets and non-US monetary experienced an increase in volatility. The UK and the US imposed sanctions on Russian aluminum again, and Biden called for a 25% tariff on China’s aluminum semis, triggering turbulence in global metals market. The domestic aluminum supply rose further, but downstream demand dragged down inventories, supporting aluminum prices. The domestic market prices may fluctuate at a high level amid global aluminum trade friction.

Lead

LME lead opened at $2164/mt last evening and rose by 1.11% to close at $2184/mt, with the lowest point at $2141/mt and the highest point at $2192/mt.

Overnight, the most active SHFE 2406 opened at 16805 yuan/ton, finally closing at 16965 yuan/ton, an increase of 0.77%.

Zinc

LME zinc opened at $2825/mt yesterday evening, and hit a high of $2827.5/mt before falling back to $2758/mt, and closed at $2790/mt, a decrease of $36.5/mt or 1.29%. Trading volume increased to 10641 lots, and open interest grew 2068 lots to 245,000 lots. LME zinc inventory dropped by 325 mt or 0.13% to 255850 mt. Most non-ferrous metals fell back, but the U.S. manufacturing PMI data for April unexpectedly cooled to a four-month low, and the U.S. dollar index fell accordingly.

Last evening, the SHFE 2406 zinc contract opened at 22175 yuan/ton with a low of 22140 yuan/ton and a high of 22480 yuan/ton. It finally closed down at 22450 yuan/ton, down 25 yuan/ton, or 0.11%. The trading volume dropped to 96058 lots, and the open interest decreased by 633 lots to 110,000 lots. Spot consumption was depressed due to previous high zinc prices. Fundamentals support weakened.

Tin

SHFE 2405 tin contract rebounded slightly after opening lower and traded around 252,000 yuan/mt, closing at 252,890 yuan/mt, down 4.71%.

Yesterday, spot premiums and discounts in domestic spot market for various tin ingot brands were as below. Small brand tin ingots were offered at discounts of 600-1,200 yuan/mt for SHFE 2405 tin contract, versus discounts of 0-1,000 yuan/mt for delivery brands and premiums of 200-400 yuan/mt for Yunxi brand. Tin prices declined sharply yesterday. The purchasing willingness of downstream enterprises increased, and they restocked aggressively.

Nickel

On Tuesday, the most-traded SHFE nickel contract opened at 144,110 yuan/mt, and closed at 140,970 yuan/mt, down 2,610 yuan/mt compared with the last trading day. Trading volume rose 43,260 lots to 472,233 lots, and open interest decreased 2,719 lots to 104,054 lots. The most-traded SHFE nickel contract fluctuated downward. It fell rapidly in a short period of time after opening, with the lowest at 140,800 yuan/mt and a final decrease of 2.67%.