SMM Morning Comments (Apr 15): Shanghai base metals opened mixed Wednesday, London metals rallied after holiday

SHANGHAI, Apr 15 (SMM) – SHFE base metals traded mixed on Wednesday morning, after a broad rally on Tuesday which was prompted by lifted market sentiment following better-than-expected China March trade data.

LME base metals went higher for the most part after trading returned from the Easter Monday holiday. Tin led the increases with a rise of 3.4%. Copper advanced 3.1%, aluminium added 2.1%, nickel climbed 1.8%, zinc gained 1.1%, while lead slipped 1.3%.

US stocks closed sharply higher and the US dollar softened on Tuesday, as risk appetite returned amid growing expectations that the worst of the COVID-19 pandemic may has passed.

Copper: Three-month LME copper increased on Tuesday as investors still concerned about the damage caused by the coronavirus outbreak on operations at global major mining areas. LME copper closed 3.11% higher on the day at $5,188.5/mt, with pressure above from $5,200/mt. Copper prices may face downward risk as prices of oil plunged on decreased demand from the pandemic, which outweighed production cuts OPEC agreed to over the weekend. LME copper is expected to trade between $5,130-5,190/mt today with the most-liquid SHFE contract at 41,400-42,000 yuan/mt. Spot premiums are seen between 80-100 yuan/mt and elevated futures may sideline consumers. 

Aluminium: Three-month LME aluminium rebounded after dipped, closing up 2.09% on the day at $1,515/mt with short covering their positions. The most-traded SHFE contract has increased to a more than three-week high, with trading range expected between 11,600-11,850 yuan/mt today. 

Zinc: Three-month LME zinc trimmed its increase following declines in crude oil prices, ending up 1.1% on the day at $1,930/mt. Disrupted consumption amid the COVID-19 pandemic overseas drove up LME zinc inventories. This, together with recession fears, reinforced bearish prospects for near-term zinc prices, even as governments around the world have stepped up efforts to boost consumption. LME zinc is expected to trade between $1,900-1,950/mt today with the most-active SHFE contract at 15,500-16,000 yuan/mt. Ramped-up infrastructure construction in China will bolster galvanising demand, but export orders of die casting zinc have been badly hit by the epidemic. The premiums of 0# domestic Shuangyan zinc are likely at 80-90 yuan/mt. 

Nickel: Thee-month LME nickel hovered at high levels on the first trading day this week, hitting a session high of $11,900/mt and finished the day 1.75% higher at $11,905/mt. It has climbed for the fifth consecutive day with the K-indicator rising above the Bollinger middle band. Pressure above from $11,900/mt will be monitored today. 

Lead: Three-month LME lead lost steam after it strengthened during the Asian trading hours with a higher SHFE lead. It came off from a session high of $1,758/mt and closed at $1,703.5/mt, 1.3% lower on the day. Pressure from the 40-day moving average may keep LME lead rangebound today. 

Tin: A rallied SHFE tin lifted three-month LME tin, which hit an intraday high of $15,650/mt and retreated to end at $15,460/mt, up 3.4% on the day. LME tin inventories shank 150 mt on Tuesday to 7,095 mt. Today, LME tin is expected to test pressure from $15,800/mt.