SHANGHAI, May 19 (SMM) – SHFE nonferrous metals rose across the board on Tuesday, extending increases from the prior day, as investors awaited more supportive policies in the upcoming China’s ‘two sessions’ to be convened on May 21. 

Optimism about a potential vaccine for the coronavirus and hopes for economic recovery as more countries reopen their economies also bolstered market sentiment. 

Nickel was the best performer on Tuesday with a rally of 3.02%. Copper advanced 1.82%, aluminium gained 1.3%, lead added 1.05%, zinc advanced 1.18%, and tin went up 1.3%. 

The ferrous complex also traded higher as iron ore surged 3.64% on the back of low inventories and reduced arrivals at Chinese ports. Rebar increased 1.42%, hot-rolled coil added 1.26%, stainless steel climbed 0.45% and coke rose 1.44%. 

SMM estimates that a total of 88 vessels carrying 13.51 million mt of iron ore arrived at major Chinese ports during May 10-16, down 540,000 mt from the prior week.

Copper: The most-traded SHFE July contract jumped to a session high of 44,030 yuan/mt after opening, and retreated quickly to stabiles around 43,750 yuan/mt, ending the day 1.82% higher at 43,690 yuan/mt. The SHFE copper contracts remained in a backwardation structure, with the price spread between June and July contracts narrowing to 100 yuan/mt. The July contract has advanced above all moving averages, and technical indicators point to some further upward potential. Tonight, the contract may test pressure from 44,000 yuan/mt. 

Aluminium: The most-liquid SHFE July contract gained for the fifth consecutive day as it hit the highest level in over two months, at 12,980 yuan/mt, ending the day 1.3% higher at 12,850 yuan/mt. It is expected to continue to test pressure above from 13,000 yuan/mt tonight. 

Zinc: The most-active SHFE July contract pared gains as it came off from an intraday high of 16,965 yuan/mt, closing 1.18% higher on the day at 16,750 yuan/mt. It still faced heavy pressure above and may hover weakly tonight. 

Lead: The most-active SHFE lead contract, which switched to the July contract, trimmed some increase from overnight as fundamentals were unable to support it above 14,000 yuan/mt. The July contract finished the day 1.05% higher at 13,955 yuan/mt. Any downside room will be capped due to the positive macroeconomic sentiment. 

Tin: The most-liquid SHFE July contract pulled back after opened at highs, slipping to a session low of 130,070 yuan/mt and ended the day 1.3% higher at 130,610 yuan/mt. Support below is seen from the 20-day moving average, or 128,000 yuan/mt.