SMM Morning Comments (Apr 28): Shanghai base metals fell across the board as investors look to Fed meeting

SHANGHAI, Apr 28 (SMM) — Nonferrous metals on the SHFE fell for the most part on Wednesday morning, while their LME counterparts all cruised lower, as investors are awaiting a policy decision by the U.S. Federal Reserve on Wednesday. 

In overnight trading, Shanghai base metals rose for the most part. Zinc advanced 0.38%, nickel rose 1.5%, lead added 0.45% and tin gained 0.37%, while copper shed 0.4% and aluminium weakened 0.24%. 

The LME complex, except for aluminium, all closed higher on Tuesday. Copper rose 1.03%, zinc edge up 0.05%, nickel increased 1.74%, lead gained 0.75% and tin added 0.13%, while aluminium slid 0.27%. 

Copper: Three-month LME copper advanced 1.03% to close at $9,878.5/mt on Tuesday, while the most-traded SHFE 2106 copper contract shed 0.4% to end at 72,190 yuan/mt in overnight trading. US consumer confidence index in April surged to the highest level since the outbreak of the pandemic. Investors remained positive above global economic recovery due to efficient vaccination rollout and economic stimulus packages. LME copper is expected to trade between $9,800-9,880/mt today, and SHFE copper between 71,800-72,300 yuan/mt, while spot copper will be traded between discounts of 280-190 yuan/mt.

Aluminium: Three-month LME aluminium settled 0.27% lower at $2,392.5/mt on Tuesday, and is expected to trade between $2,380-2,400/mt today. 

The most-active SHFE 06 aluminium contract weakened 0.24% to close at 18,480 yuan/mt in overnight trading. Pre-holiday restocking demand will support aluminium prices. SHFE aluminium is likely to fluctuate between 18,300-18,500 yuan/mt today.

Zinc: Three-month LME zinc inched up 0.05% to end at $2,928.5/mt on Tuesday, with open interest adding 1,766 lots to 248,000 lots. Zinc stocks across LME-listed warehouses dropped by 1,325 mt to 291,950 mt.  LME zinc is likely to move between $2,890-2,940/mt today. 

The most-liquid SHFE 2106 zinc contract gained 0.38% to settle at 22,290 yuan/mt in overnight trading, posting a three-day winning streak, with open interest rising 4,714 lots to 104,921 lots.   The June contract is likely to move between 21900-22400 yuan/mt today, while spot discounts for domestic 0# Shuangyan will be seen at 40-50 yuan/mt against the May contract.

Nickel: The most-traded SHFE 2106 nickel contract increased 1.5% to close at 126,860 yuan/mt in overnight trading, with open interest losing 3,072 lots to 154,000 lots.

Lead: Three-month LME lead climbed 0.75% to end at $2,093.5/mt on Tuesday. LME lead stocks shrank by more than 1,000 mt, which supported lead prices. Whether the contract could break above the 2,100 mark today will be monitored. 

The most-active SHFE 2106 lead contract settled 0.45% higher at 15,510 yuan/mt in overnight trading, and whether the contract could steady above the 15,500 mark today will be watched.

Tin: Three-month LME tin added 0.13% to close at $27,185/mt on Tuesday, with open interest adding 107 lots to 11,737 lots. LME tin stocks shrank by 255 mt to 1,290 mt. LME tin is expected to move between $26,500-27,500/mt today.

The most-liquid SHFE 2106 tin contract rose 0.37% to end at 186,820 yuan/mt in overnight trading, with open interest losing 179 lots to 21,608 lots. It is expected to fluctuate between 183,000-188,000 yuan/mt today.