SMM Evening Comments (Apr 6): Shanghai nonferrous metals closed mostly higher, lead fell 1.12%

SHANGHAI, Apr 6 (SMM) – SHFE nonferrous metals rose for the most part on Tuesday April 6 after major indexes on Wall Street surged to record closing highs overnight stateside.

Tin, the best performer, rose 2.23%, copper advanced 1.3%, nickel went up 1.83%, zinc climbed 1.56% and aluminium gained 0.23%, while lead fell 1.12%.

The ferrous complex closed mixed. Rebar advanced 2.05%, hot-rolled coil rose 0.92%, while iron ore fell 0.61%.

Copper: The most-traded SHFE 2105 copper contract finished the day 1.3% higher at 67,010 yuan/mt. Open interest rose 7,096 lots to 114,000 lots.

US ISM data showed that the service industry reached a record growth in March, and both orders and business activity index reached new highs, reflecting that the economy is accelerating. In addition, Yellen reiterated that the $1.9 trillion anti-pandemic relief bill would not cause inflationary pressure, suggesting that interest rates will continue to be low in the next few years, and the dollar will be under pressure and go down to near 92.5. White House officials and Biden's allies revealed that Biden's government plans to win over Republican voters, independents, mayors, governors and local politicians to pass the $2.25 trillion infrastructure plan. The new infrastructure plan of Biden-Harris government is likely to become the next story to attract bulls.

China's foreign exchange reserve data in March and the guidance of LME copper will be monitored tonight.

Aluminium: The most-liquid SHFE 2105 aluminium contract finished the day 0.23% higher at 17,515 yuan/mt. Open interest fell 3,672 lots to 197,427 lots.

Zinc: The most-active SHFE 2105 zinc contract rose to an intraday high of 21,885 yuan/mt and closed up 1.56% at 21,760 yuan/mt. Open interest fell 4,990 lots to 72,102 lots. The US said that the 1.9 trillion economic stimulus bill will not trigger inflationary pressure, and further release the signal that the easing policy is sustainable. In March, the number of new nonfarm payroll in the US reached the highest since July, boosting market sentiment, with nonferrous metals generally rising and zinc prices following. On fundamentals, TCs for domestic zinc concentrate still had a downward trend, which is expected to continue to provide support for zinc prices. The position of the 40-day moving average will continue to be monitored tonight. The contract is expected to fluctuate robustly under support.

Nickel: The most-traded SHFE 2106 nickel contract ended the day 1.83% higher at 125,080 yuan/mt today. Open interest rose 12,976 lots to 157,066 lots.

Lead: The most-traded SHFE 2105 lead contract slid to a session low of 14,930 yuan/mt and ended the day 0.33% lower at 14,965 yuan/mt. Open interest fell 16,000 lots to 44,000 lots. There was no obvious accumulation of social inventories of lead ingots. Under the background of recent tepid consumption of both supply and demand, social inventories of lead ingots are expected to post slower increase, the decline of battery scrap was limited, and the profit of secondary lead narrowed. The impact of production and shipment willingness of secondary lead on the market should be monitored in the near term. The contract will test support from 14,900 yuan/mt tonight.

Tin: The most-liquid SHFE 2106 tin contract fell to a session low of 182,600 yuan/mt and finished the day 2.23% higher at 184,300 yuan/mt today. Open interest rose 700 lots to 34,926 lots.