SMM Evening Comments (Apr 14): Shanghai Nonferrous Metals Closed Mostly with Gains on Two-month Low US Dollar Index

SHANGHAI, Apr 14 (SMM) - Shanghai nonferrous metals closed mostly with gains in day trading. The US March PPI increased 2.7% year-on-year, falling for nine consecutive months, lower than expected and the previous reading. US inflation data fell more than expected, strengthening market expectations for the Fed to raise the rates for the last time in May in its rate hike cycle. Besides, the US dollar index fell to a two-month low.

SHFE copper added 1.30%, aluminium grew 1.27%, lead fell 0.10%, zinc climbed 1.75%, tin rose 2.52%, and nickel gained 1.96%.

Copper: SHFE 2305 copper closed up 900 yuan/mt or 1.30% at 70,050 yuan/mt. The open interest gained 14,148 lots to 184,910 lots.

The intraday copper futures prices once ballooned 1,000 yuan/mt. The downstream companies were reluctant to restock amid the approaching delivery of the SHFE 2304 copper. The spread between the SHFE front-month and next-month contracts narrowed, thus the traders were less willing to ship. The spot transactions were slack today.

Aluminium: SHFE 2305 aluminium grew 235 yuan/mt or 1.27% to 18,725 yuan/mt. The open interest dipped 822 lots to 174,704 lots.

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: SHFE 2305 lead closed down 15 yuan/mt or 0.10% at 15,305 yuan/mt.

SHFE lead prices moved sideways today. The market saw fewer quotes from cargo holders amid the low spot supply. Downstream companies only purchased on rigid needs. A few traders lowered their premiums, but the transactions of small orders did not improve. The most-traded SHFE lead contract will move rangebound in the short term on a stable macro front.

Zinc: SHFE 2305 zinc climbed 385 yuan/mt or 1.75% to 22,395 yuan/mt. The open interest dropped 12,023 lots to 94,575 lots.

The futures prices soared today. Traders generally shipped their goods but were less willing to cut quotes. The overall transactions decreased greatly since the downstream companies focused on pricing after the rise in zinc prices.

Tin: SHFE 2305 tin rose 4,860 yuan/mt or 2.52% to 197,880 yuan/mt. The open interest fell 395 lots to 48,607 lots.

Nickel: SHFE 2305 nickel closed up 3,570 yuan/mt or 1.96% at 185,250 yuan/mt. The open interest decreased 418 lots to 73,567 lots.

On April 14, premiums of Jinchuan nickel were 6,200-7,500 yuan/mt. The average premium stood at 6,850 yuan/mt, down 1,050 yuan/mt from the previous trading day. NORNICKEL nickel was quoted at premiums of 7,000-7,300 yuan/mt, with an average of 7,150 yuan/mt, down 100 yuan/mt from a day ago. The import window remained closed, and NORNICKEL nickel supply was tight. The spot transactions were weak amid rising futures prices in the early trading. Nickel briquette prices were 188,800-190,000 yuan/mt, an increase of 4,150 yuan/mt from the previous trading day. The nickel briquette transactions were slack as it was still traded at premiums over nickel sulphate.

[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.]