SMM Morning Comment For SHFE Base Metals On Apr 30

SHANGHAI, Apr 30 (SMM) –

Copper

Overnight, LME copper opened at $10,029.5/mt, with its low and high at $10,020/mt and $10,185/mt before closing at $10,162/mt, up 2.03%. Trading volume was 22,000 lots, and open interest was 339,000 lots. Overnight, the most-traded SHFE 2406 copper contract opened at 81,130 yuan/mt, with its low and high at 81,120 yuan/mt and 81,940 yuan/mt before closing at 81,930 yuan/mt, up 1.49%. On the macro level, concerns on the slowdown in US economic growth led to the weakening US dollar index, which is bullish for copper prices. Fundamentally, copper prices remain high this week and spot transactions have recovered, but the market holds a pessimistic outlook. Some companies have stopped production and reduced inventory. Although companies have a need to stock up before the holiday, long-term orders can basically meet the demand. As of April 29, SMM copper inventory in China's major regions was 387,900 mt, down 16,800 mt from last Thursday, and the total inventory increased by 219,800 mt from 168,100 mt in the same period last year. Copper prices are expected to remain high.

Aluminum

Overnight, the most-traded SHFE 2406 aluminum contract opened at 20,560 yuan/mt, with its lowest and highest at 20,545 yuan/mt and 20,690 yuan/mt before closing at 20,615 yuan/mt, up 100 yuan/mt or 0.49%. LME aluminum opened at $2,567/mt in the previous trading day, with its high and low at $2,595.5/mt and $2,542.5/mt respectively before closing at $2,588/mt, up $27.5/mt or 1.07%.

Summary: Fundamentally, overseas deliverable metals remained tight. The import window closed. Domestic aluminum supply maintained a growth trend. Downstream operating rate remained stable. Aluminum ingot inventories continued to drop. In the short term, low inventory can support aluminum prices, but we should pay close attention to the impact of macro front on market sentiment.

Lead

Overnight, LME lead opened at $2,205/mt. Affected by bauxite supply shortage and high ingots inventory, during the Asian trading session, LME lead prices fell to $2200/mt. After that, the US dollar fell from highs, and LME lead fluctuated upward, eventually closing at $2227.5/mt, up 1.07%.

Overnight, the most-traded SHFE 2406 lead contract opened at 17,290 yuan/ton. At the beginning of the session, amid bullish and bearish factors, SHFE Lead moved rangbound between 17,245 yuan/mt and 17,290 yuan/mt. Later, driven by the rise of LME Lead and the tight supply of domestic ore, SHFE Lead rose sharply to 17,475 yuan/mt. However, domestic lead consumption remained weak, and SHFE lead prices retreated in the second half, eventually closing at 17,375 yuan/mt, up 0.7%; open interest reached 51,219 lots, down 2,095 lots from the previous trading day.

Zinc

Overnight, LME zinc prices continued to rise, finding support at the moving average. LME zinc inventory increased by 950 mt to 255,400 mt, up 0.37%. The weak US dollar overnight led to a general rise in non-ferrous metals, with zinc leading the way in gains. The news of production cuts at the ore end was confirmed, providing sufficient momentum for LME zinc price hikes. Therefore, LME zinc prices are expected to continue to rise. SHFE zinc prices moved up overnight, but met resistance at the upper end of the Bollinger Bands. Driven by LME zinc, SHFE zinc prices hit the highest level in nearly a year, but it is recommended to operate with caution since fund changes are relatively frequent before the holiday.

Tin

Overnight, SHFE 2406 tin contract rose sharply and then fell, closing at 261,540 yuan/mt, up 0.74%.

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 300-1,000 yuan/mt for SHFE 2406 tin contract, versus discounts of 0-1,000 yuan/mt for delivery brands and discounts of 100-300 yuan/mt for Yunxi brand. In yesterday's early trading, SHFE 2405 tin contract remained stable. Downstream companies buying sentiment performed well.

Nickel

On Monday, the most-traded SHFE nickel contract opened at 145,000 yuan/mt, and closed at 142,850 yuan/mt, down 3,020 yuan/mt compared with the last trading day. Trading volume rose 21,522 lots to 291,042 lots, and open interest increased 1,132 lots to 100,654 lots. The most-traded SHFE nickel contract was relatively stable, fluctuating within a certain range, with the final decrease of 0.4%.