SHFE copper and aluminium registered new ten-year highs

SHANGHAI, Apr 27 (SMM)—Non-ferrous metals concept stocks strengthened sharply in early trading, Zhongyuan New Materials pulled up by its daily limit, and Electrical Alloy, Yunnan Tin Group, Zhangyuan Tungsten, Jiangxi Copper and Yunnan Aluminium surged. Since the beginning of this week, metals prices rose broadly. The most-traded SHFE copper contract at one point surged to 72,460 yuan/mt yesterday, the highest in nearly ten years, and SHFE aluminium also registered a ten-year high today. Other base metals also increased significantly.

Recently, the performance of non-ferrous metals companies has generally been outstanding. Among copper companies, Zijin Mining achieved a total profit of 4.35 billion yuan in the first quarter, a year-on-year increase of 140.4%; net profit attributable to the parent company was 2.51 billion yuan, a year-on-year increase of 141.4%; operating net cash flow came in at 5.25 billion yuan, a year-on-year increase of 125.6%. In terms of aluminum companies, Chalco’s first-quarter performance forecast shows that the company expects to achieve a net profit of 967 million yuan attributable to the parent in the first quarter of 2021, a year-on-year increase of nearly 30 times. Shenhuo expects its net profit in the first quarter to soar by more than 1,400% year-on-year.

The manufacturing boom in European and American countries continues to improve, strong European currencies pressured the US dollar, and this, combined with ample liquidity, boosted copper prices. However, in the domestic market, high copper prices deterred downstream users from purchasing. Chilean port workers called for a strike on Monday in response to President Sebastian Pinera's block of a bill that would allow people to make a third round of early withdrawals from pension funds. The market was concerned that this move may disrupt this country’s exports, which accounts for about a quarter of the world's copper supply.

The rise in aluminium supply is expected to be limited in April due to output cuts and maintenance across Inner Mongolia plants and imports limited by shipping schedules. Besides, high aluminium prices also dampened downstream consumption. However, continuing declines in domestic primary aluminium and aluminium billet inventories are supportive to aluminium prices.