SMM Evening Comments (Apr 19): Shanghai nonferrous metals closed mostly higher, nickel fell 1.28%

SHANGHAI, Apr 19 (SMM) – SHFE nonferrous metals rose for the most part on Monday April 19, mirroring trading in global markets.

Tin, the best performer, rose 1.4%, copper advanced 1.22%, lead went up 0.83%, zinc climbed 0.57% and aluminium gained 0.05%, while nickel fell 1.28%.

The ferrous complex closed mixed. Hot-rolled coil decreased 0.54%, rebar slipped 0.95%, while iron ore rose 0.81%.

Copper: The most-traded SHFE 2106 copper contract finished the day 1.22% higher at 69,660 yuan/mt. Open interest rose 6,689 lots to 183,000 lots.

In March, the housing starts in the US was the highest in nearly 15 years. In April, the consumer confidence index rebounded, and inflation expectations rose by 3.7%. The US dollar index continued to fall to a four-week low, and the strong economic data and the performance of bank financial reports supported the economic recovery. The national economic operation data in the first quarter of China performed well. The GDP in the first quarter increased by 18.3% year on year and 0.6% quarter on quarter. In March, the total retail sales of social consumer goods increased by 34.2% year on year, and the added value of industrial enterprises above designated size increased by 14.1% year on year. The market bullish sentiment continued to rise.

Euro zone seasonally-unadjusted current account for February, and whether the bullish sentiment in the market could continue will be monitored tonight.

Aluminium: The most-liquid SHFE 2106 aluminium contract finished the day 0.05% higher at 18,220 yuan/mt. Open interest fell 7,849 lots to 163,227 lots.

Zinc: The most-active SHFE 2106 zinc contract closed up 0.57% at 21,960 yuan/mt. Open interest rose 3,029 lots to 59,874 lots. Zinc stocks fell 3,000 mt over the weekend, supporting zinc prices. However, the increasing zinc prices continued to restrain the downstream consumption, the supply at the mine end is expected to continue to loosen, and the upward momentum of zinc price was limited. The contract is expected to fluctuate weakly under pressure tonight.

Nickel: The most-traded SHFE 2106 nickel contract ended the day 1.28% lower at 121,390 yuan/mt today. Open interest rose 15,258 lots to 166,740 lots.

Lead: The most-traded SHFE 2105 lead contract rose to an intraday high of 15,135 yuan/mt and ended the day 0.83% higher at 15,105 yuan/mt. Open interest fell 5,972 lots to 39,953 lots. Social inventories of lead ingots fell slightly compared with last Friday. Although domestic consumption has not improved in the off-season, the market has certain confidence in the bottom correction of lead prices as environmental protection supervision has not yet ended, regional supply of secondary lead is tight, and LME lead is constantly strengthening. Whether the purchase and consumption demand before the upcoming May Day holiday will be released ahead of time will be monitored in the near term. Whether the contract could maintain its upward trend and continue to challenge the target position of 60-day moving average will be monitored tonight.

Tin: The most-liquid SHFE 2106 tin contract fell to a session low of 183,660 yuan/mt and finished the day 1.4% higher at 185,200 yuan/mt today. Open interest rose 163 lots to 34,865 lots. Recently, the reduction and suspension of production in the main smelting producing areas increased, and the tight spot has certain support for the trend of SHFE tin. The Fed maintained an ultra-loose monetary policy, which put pressure on the US dollar. U.S. President Biden proposed a $1.52 trillion budget for the 2022 fiscal year, boosting market risk sentiment. Although the tight supply in SHFE tin market supported the trend, it can not be ignored that the rising tin prices will affect the downstream enthusiasm of receiving goods and the slow decline of inventories will restrict tin prices. The contract will keep fluctuating strongly in the near term. Pressure above will be seen from 188,000 yuan/mt today. Support below will be seen from 180,000 yuan/mt today.