SMM Morning Comments (Apr 30): Shanghai base metals opened mixed ahead of Labour Day holiday

Published: Apr 30, 2020 09:52 (GMT+8)
Copper and zinc held onto gains from the previous session and edged up by less than 1%. Nickel showed signs of bouncing back, while aluminium and nickel traded slightly lower, with tin dipping more than 1%.

SHANGHAI, Apr 30 (SMM) – SHFE nonferrous metals traded in a mixed note on the morning of Thursday, a day before the five-day Labour Day holiday. 


Copper and zinc held onto gains from the previous session and edged up by less than 1%. Nickel showed signs of bouncing back, while aluminium and nickel traded slightly lower, with tin dipping more than 1%. 


LME base metals ended mixed Wednesday. Copper led the increase with a rise of 0.72%. Zinc added 0.44%, lead increased 0.37%, while aluminium went flat, nickel slipped 0.08%, and tin lost 0.59%.


Oil futures closed higher on Wednesday, with US benchmark prices rallying 22% as data showed a slightly smaller-than-expected weekly climb in domestic crude supplies, along with declines in gasoline stocks and oil production.


West Texas Intermediate crude for June delivery rose $2.72, or 22%, to settle at $15.06/barrel on the New York Mercantile Exchange.


Zinc: Three-month LME zinc traded robustly above all moving averages, adding 0.44% on the day to finish at $1,943.5/mt, after prices hit a session high of $1,949.5/mt. LME zinc inventories rose 0.7%, or 675 mt on Wednesday to 97,525 mt. Trading range is expected at $1,920-1,970/mt today with the most-liquid SHFE contract at 16,000-16,500 yuan/mt. Downstream consumers are likely to step up stockpiling before the holiday as the charging of highway tolls will resume on May 6. 


Nickel: Three-month LME nickel hovered around $12,300/mt, closing down 0.08% on the day at $12,320/mt following an intraday high at $12,370/mt. Today, LME nickel is expected to remain rangebound around $12,300/mt, with the most-active SHFE nickel contract trading in a broad band around 100,000 yuan/mt. Stepped-up commissioning of NPI projects in Indonesia will expand NPI supply in the third quarter, and squeeze the market share of refined nickel using to produce stainless steel, while near-term nickel prices will remain supported amid expectations of rising demand. 


Lead: Three-month LME lead continued to edge higher with strong support from the five-day moving average, ending up 0.37% on the day at $1,649/mt. But limited upward momentum kept it between the five- and 10- day moving averages. 


Tin: Three-month LME tin traded with support from the five-day moving average and finished the day $90/mt lower at $15,270/mt. Support below is seen from $15,100/mt today. 

 

 

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