SMM Morning Comments (Apr 12) Shanghai base metals fell across the board on dollar bounce-back

SHANGHAI, Apr 12 (SMM) — Shanghai base metals all cruised lower on Monday morning as the dollar increased amid rising US Treasury yields.   

Shanghai base metals fell for the most part last Friday night. Copper shed 0.88%, zinc weakened 0.18%, nickel slid 0.84%, lead dropped 0.5% and tin plunged 2.02%, while aluminium inched up 0.03%. 

The LME complex all closed lower last Friday. Copper weakened 0.89%, aluminium slid 0.72%, zinc slipped 0.86%, nickel fell 1.07%, lead shed 0.18% and tin edge down 0.04%. 

Copper: Three-month LME copper shed 0.89% to close at $8,929/mt last Friday, while the most-traded SHFE 2105 copper contract dropped 0.88% to end at 66,280 yuan/mt last Friday night. US producer prices increased more than expected in March, resulting in the largest annual gain in 9-1/2 years, fitting in with expectations for higher inflation as the economy reopens amid an improved public health environment and massive government funding. The US dollar cruised higher last Friday amid rising US Treasury yields, which weighed on copper futures. Oil prices edged lower in rangebound trade on Friday on rising supplies from major producers and concerns over a mixed picture on the COVID-19 pandemic’s impact on fuel demand. LME copper is expected to trade between $8,890-8,970/mt today, and SHFE copper between 65,900-66,400 yuan/mt, while spot premiums will be seen at 20-100 yuan/mt.

Aluminium: Three-month LME aluminium slid 0.72% to settle at $2,269/mt last Friday, and is expected to move between $2,245-2,280/mt today.

The most-active SHFE 2105 aluminium contract inched up 0.03% to close at 17,515 yuan/mt last Friday night, with open interest losing 2,185 lots to 184,000 lots. It is likely to fluctuate between 17,350-17,800 yuan/mt today, while spot cargoes will be traded between discounts of 10 yuan/mt and premiums of 10 yuan/mt.

Zinc: Three-month LME zinc ended 0.86% lower at $2,836/mt last Friday, with open interest decreasing 1,551 lots to 235,000 lots. LME zinc stocks were unchanged at 267,650 mt. LME zinc is likely to move between $2,810-2,860/mt today.

The most-liquid SHFE 2105 zinc contract weakened 0.18% to settle at 21,980 yuan/mt last Friday night, with open interest adding 659 lots to 80,095 lots. Zinc social inventories continued to shrink, which supported zinc prices. The May contract is likely to move between 21,500-22,000 yuan/mt today, while spot discounts for domestic 0# Shuangyan will be seen at 20-30 yuan/mt against the contract.

Lead: Three-month LME lead closed 0.18% lower at $1,972/mt last Friday. 

The most-traded SHFE 2105 lead contract fell 0.5% to end at 14,810 yuan/mt last Friday night.

Tin: Three-month LME tin edged down 0.04% to end at $25,705/mt last Friday, with open interest rising 252 lots to 12,392 lots. It is expected to move between $25,000-26,000/mt today.

The most-traded SHFE 2106 tin contract plunged 2.02% to settle at 179,060 yuan/mt last Friday night, with open interest adding 454 lots to 33,343 lots. China’s tin ore output in January-February rose 26% year on year, and social tin ingot inventories rose slightly last week, which will weigh on tin prices. SHFE tin is likely to move between 177,000-185,000 yuan/mt today.