SMM Evening Comments (Apr 27): Shanghai nonferrous metals rose across the board as investors looked to Fed meeting, earnings

SHANGHAI, Apr 27 (SMM) – SHFE nonferrous metals closed higher across the board on Tuesday April 27 and investors continued to monitor India's Covid situation.

Nickel was the best performer with a rise of 3.61%. Copper rose 3.01%, aluminium advanced 1.42%, tin climbed 0.71%, zinc increased 2.25% and lead went up 0.88%.

A total of 75 vessels carrying 9.91 million mt of iron ore arrived at major Chinese ports during April 18-24, SMM estimates. This was down 2.4 million mt from the previous week and 1.3 million mt from the same period last year.

The ferrous complex also rose across the board. Iron ore increased 1.89%, rebar rose 0.54%, and hot-rolled coil climbed 0.84%.

Copper: The most-traded SHFE 2106 copper contract finished the day 3.01% higher at 72,480 yuan/mt. Open interest rose 18 lots to 189,000 lots. The core capital orders of the US increased strongly in March, and economic recovery in Europe and the US remained stroong. OPEC+ predicted a strong recovery in global oil demand this year, while the recent Indian pandemic cast a shadow over the prospects for reform, and international oil prices declined somewhat. However, the global crude oil inventories will decline at an average rate of 1.2 million barrels per day this year. Even if the pandemic situation is repeated in some underdeveloped countries, it will not affect the overall global recovery background. Now the market is more concerned about the impact of the Federal Reserve's interest rate decision on market sentiment on Wednesday. The consumer confidence index of the Conference Board in April and whether the US economic data could once again boost the market sentiment to a new high will be monitored tonight.

Aluminium: The most-liquid SHFE 2106 aluminium contract finished the day 1.42% higher at 18,605 yuan/mt. Open interest rose 2,936 lots to 298,607 lots.

Zinc: The most-active SHFE 2106 zinc contract closed up 2.25% at 22,235 yuan/mt. Open interest rose 15,013 lots to 100,207 lots. Biden raised the threshold of capital gains tax revenue. OPEC+ is expected to have a strong recovery in demand, LME zinc inventories recorded a decrease, and the LME market drove zinc to fluctuate upwards. On fundamentals, the tight supply of zinc ingots in April continued to provide basic support for zinc prices. The safety of vaccines in Europe and US still aroused worries, the Indian pandemic broke out, and the death toll from Spanish pandemic rose. The transaction of zinc was weak at high prices, the premium went down, and the upward trend of zinc was still under pressure. Whether the zinc price could break through the previous high will be monitored tonight. It is expected that zinc prices will keep fluctuating.

Nickel: The most-traded SHFE 2106 nickel contract ended the day 3.61% higher at 126,560 yuan/mt today. Open interest rose 11,867 lots to 157,132 lots.

Lead: The most-traded SHFE 2106 lead contract ended the day 0.88% higher at 15,470 yuan/mt. Open interest rose 4,778 lots to 51,269 lots. Near the Labor Day holiday, the downstream restocked on demand, while the macro atmosphere was warm, and the LME lead traded strongly. It is expected that SHFE lead will continue to fluctuate strongly before the holiday. Whether the long positions were boosted to drive the contract to continue to break through the first-line pressure level of 15,500 yuan/mt will be monitored tonight.

Tin: The most-liquid SHFE 2106 tin contract fell to a session low of 185,120 yuan/mt and finished the day 0.71% higher at 186,140 yuan/mt today. Open interest fell 2,018 lots to 21,787 lots.