SMM Evening Comments (Apr 26): Shanghai nonferrous metals rose across the board as investors focused on busy week of data, earnings

SHANGHAI, Apr 23 (SMM) – SHFE nonferrous metals closed higher across the board on Monday April 26 as investors gear up for a busy week on the data and earnings front.

Nickel was the best performer with a rise of 2.63%. Copper rose 2.38%, aluminium advanced 0.58%, tin climbed 2.04%, zinc increased 2.31% and lead went up 0.2%.

The ferrous complex rose across the board. Iron ore increased 4.33%, rebar rose 2.34%, and hot-rolled coil climbed 3.15%.

Copper: The most-traded SHFE 2106 copper contract finished the day 2.38% higher at 70,980 yuan/mt. Open interest rose 11,134 lots. IHS Markit announced that the preliminary purchasing managers' index (PMI) of manufacturing and service industries in the US in April reached the highest level since 2009. The sales volume of new residential buildings in the US reached the highest level since 2006 in March. In April, the PMI of Britain showed that the economic activity had the fastest growth rate in seven years, and the retail sales in March had the biggest growth rate in nine months. Eurozone PMI data in April was stronger than expected. European and American economic data performed well, and market sentiment was high. In addition, the trend of weak domestic market and strong overseas market continued, and the increase of anti-hedging operations in the market is expected to further boost the domestic market. The IFO business climate index of Germany in April, the durable goods order data of the US in March, and whether the bullish sentiment could continue to support the copper prices will be monitored tonight.

Aluminium: The most-liquid SHFE 2106 aluminium contract finished the day 0.58% higher at 18,360 yuan/mt. Open interest fell 3,011 lots to 295,671 lots.

Zinc: The most-active SHFE 2106 zinc contract closed up 2.31% at 21,880 yuan/mt. Open interest fell 10,675 lots to 85,194 lots. The PMI data of the US and the Eurozone performed strongly in April, and the recovery is expected to be optimistic. On fundamentals, zinc prices fluctuated at a low level last week, and zinc ingot stocks continued to fall 12,200 mt over weekend to 189,800 mt, boosting zinc prices. However, the intensification of the pandemic in India may lead to market concerns, and the spot market with high zinc prices did not perform well. The contract will test pressure from 22,000 yuan/mt tonight, and it is expected that zinc prices will fluctuate weakly under pressure.

Nickel: The most-traded SHFE 2106 nickel contract ended the day 2.63% higher at 123,150 yuan/mt today. Open interest fell 19,696 lots to 145,265 lots.

Lead: The most-traded SHFE 2106 lead contract ended the day 0.2% higher at 15,360 yuan/mt. Open interest rose 5,570 lots to 46,491 lots. Recently, the impact of environmental protection was still not over, and social inventories cannot be restocked after digestion, which continued to decline, giving certain support to the strong fluctuation of lead prices this week. However, the enthusiasm of restocking before May Day in the downstream was tepid, and the downstream kept purchasing on demand. Considering that the environmental inspection will be eased this week, the inventories of lead ingot are expected to post slower decrease, and it is necessary to be alert to the high pressure risk in the future. Whether the contract could stand firm on the five-day moving average and keep fluctuating at high will be monitored tonight.

Tin: The most-liquid SHFE 2106 tin contract fell to a session low of 183,210 yuan/mt and finished the day 2.04% higher at 186,520 yuan/mt today. Open interest fell 5,783 lots to 23,805 lots. The contract is expected to trade at high in the near term. Pressure above will be seen from 188,000 yuan/mt today. Support below will be seen from 181,000 yuan/mt today.