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SMM Morning Comments (Apr 29): Shanghai base metals opened mixed Wednesday, copper rebounded close to 1%
Apr 29,2020 10:00CST
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Source:SMM
Copper climbed close to 1% in early morning trades, erasing decline from the prior session. Aluminium and zinc gained more than 1%, with nickel trading some 0.5% higher on the day. 

SHANGHAI, Apr 29 (SMM) – SHFE nonferrous metals traded in a mixed note on Wednesday morning, following a broad decline Tuesday as oil prices resumed falling. 


Copper climbed close to 1% in early morning trades, erasing decline from the prior session. Aluminium and zinc gained more than 1%, with nickel trading some 0.5% higher on the day. 


LME base metals, except for tin and aluminium, closed higher Tuesday, with zinc leading the gains and rising 1.31%. Copper advanced 0.43%, nickel added 0.78%, lead increased 0.4%, while tin slipped 0.32% and aluminium shed 0.2%.


US benchmark oil prices finished lower on Tuesday, giving up an earlier spike, as traders continued to eye storage capacity shortage worldwide. 


Stock futures rose slightly in overnight trading on Tuesday, with all eyes on the Federal Reserve's monetary policy decision Wednesday. Optimism that countries across the globe are getting closer to reopening their economies has cheered stocks


Copper: Three-month LME copper recovered the decline from Monday, closing 0.43% higher overnight at $5,208/mt, with an intraday high of $5,252.5/mt. More countries have plans to open their respective economies is one of the main factors in a positive mood. First Quantum has lowered its guidance for 2020 by 75,000 mt of copper, citing a reduction in output expectations at the Cobre Panama mine due to the coronavirus crisis. With support from macro optimism and the supply front, LME copper is seen trading at $5,200-5,260/mt with the most-active SHFE contract at 42,300-42,700 yuan/mt today. Spot premiums are likely at 100-140 yuan/mt amid signs of slower trades. 


Zinc: Three-month LME zinc broke up pressure from several moving averages and tested the Bollinger upper band, ending the session 1.31% higher at $1,935/mt. LME zinc inventories continued to fall by 925 mt on Tuesday to 96,850 mt. Extended stoppage of mining operations in Peru threatens a shortage of raw materials. This, coupled with the hope of economy reopening in some countries, supported zinc prices. Today, LME zinc is expected to trade between $1,900-1,950/mt with the most-liquid SHFE contract at 15,800-16,300 yuan/mt. 


Nickel: Three-month LME nickel regained early losses and closed 0.78% higher on the day at $12,330/mt, after it fell below the daily moving average twice to a session low of $12,110/mt. Macroeconomic development and potential capital outflow before the upcoming Labour Day holiday will be monitored. Spot trades of nickel thinned amid sufficient supplies as consumers mostly finished their pre-holiday stockpiling. Raw materials shortage at NPI plants could ease in June as major miners in the Philippines plan to resume operations. 


Lead: Three-month LME lead trimmed some increase after rising to a session high of $1,663/mt, finishing the day at $1,643/mt, 0.4% higher on the day. Nonetheless, LME lead remained in an overall downward trend and support below will be watched. 


Tin: Three-month LME tin came off after hitting an intraday high of $15,500/mt, ending at $15,360/mt, $50/mt lower on the day. LME tin inventories decreased 135 mt on Tuesday to 5,830 mt. Support below is seen from $15,000/mt today. 

 

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