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SMM Evening Comments (Apr 2): Shanghai nonferrous metals closed mostly higher, lead fell 1.86%
Apr 2, 2021 18:00CST
SHFE nonferrous metals rose for the most part on Friday April 2.

SHANGHAI, Apr 2 (SMM) – SHFE nonferrous metals rose for the most part on Friday April 2.

Tin, the best performer, rose 2.36%, copper advanced 2.38%, nickel went up 1.89% and aluminium gained 1.36%, while lead fell 1.86% and zinc dropped 0.58%.

The ferrous complex rose across the board. Iron ore increased 1.77%, rebar rose 3.7%, and hot-rolled coil climbed 2.47%.

Copper: The most-traded SHFE 2105 copper contract finished the day 2.38% higher at 67,090 yuan/mt. Open interest fell 13,344 lots to 128,627 lots.

Out of increased confidence in economic recovery, OPEC+ unexpectedly agreed to gradually increase production from May to July. Including the additional production reduction withdrawn by Saudi Arabia, OPEC+ will increase production by more than 2 million barrels per day. However, Saudi Arabia said that OPEC+ may resume production reduction at the next meeting held on April 28th if necessary, and the logic of increasing production basically revolves around the logic of strong economic recovery, and from now on, OPEC has the ability to regulate crude oil inventories. In terms of data, the number of initial jobless claims rose unexpectedly last week, but it was still close to the lowest level during the COVID-19 outbreak. In March, the manufacturing industry recorded the strongest growth in more than 37 years, and the unexpected performance of the data gave the market some confidence. US nonfarm payrolls will be monitored tonight.

Aluminium: The most-liquid SHFE 2105 aluminium contract finished the day 1.36% higher at 17,515 yuan/mt. Open interest fell 3,434 lots to 201,099 lots.

Zinc: The most-active SHFE 2105 zinc contract slid to a session low of 21,305 yuan/mt and closed down 0.58% at 21,460 yuan/mt. Open interest rose 1,027 lots to 77,092 lots. Domestic pandemic and the upward trend of US bond yield restrained the upward momentum of zinc prices. On the fundamentals, TCs in some areas were lowered this week, while TCs for domestic zinc concentrates still had a downward trend. On the other hand, 13,700 mt of goods have been removed from the social warehouse in the seven places this week, and the downstream restocking willingness improved, which is expected to support zinc prices. The position of the 40-day moving average will continue to be monitored tonight. The contract is expected to stop falling and stabilise.

Nickel: The most-traded SHFE 2106 nickel contract ended the day 1.89% higher at 123,470 yuan/mt today. Open interest rose 2,933 lots to 144,090 lots. Nickel ore inventories across all Chinese ports decreased 345,000 wmt from March 26 to 5.74 million wmt as of April 2, showed SMM data.

Lead: The most-traded SHFE 2105 lead contract ended the day 1.86% lower at 15,015 yuan/mt. Open interest rose 416 lots to 40,313 lots. Operating rates across primary lead smelters in Henan, Hunan and Yunnan provinces fell slightly from the previous week to 58.3% in the week ended April 2, showed an SMM survey.

Tin: The most-liquid SHFE 2106 tin contract fell to a session low of 176,300 yuan/mt and finished the day 3.8% higher at 182,650 yuan/mt today. Open interest rose 4,618 lots to 34,226 lots.

Evening comments

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