SMM Evening Comments (Apr 29): Shanghai Nonferrous Metals All Closed with Gains amid Bullish News from China Government

SHANGHAI, Apr 29 (SMM) – Shanghai nonferrous metals closed with gains amid a series of bullish news from the Working Meetings of the Political Bureau that emphasised stable economic development despite disturbance from COVID.  

Shanghai copper rose 0.53%, aluminium added 0.14%, lead jumped 1.72%, zinc gained 0.83%, tin increased 1.63%, and nickel advanced 2.16%.

Copper: The most-traded SHFE 2206 copper closed up 0.53% or 390 yuan/mt at 73,600 yuan/mt, with open interest down 480 lots to 149,754 lots.

US dollar index was still high amid doubts on US economic development and hawkish Fed rhetoric. Nonetheless, the market was relatively warm today. LME copper inventory rose after fell shortly this week. SHFE warrants kept falling.

The consumption side, though have been greatly hit by the pandemic, is expected to pick up after more policy stimulus in the future.

In the spot market, the transactions lacked spotlights, and the premiums dropped intraday.

Aluminium: The most-traded SHFE 2206 aluminium closed up 0.14% or 30 yuan/mt to 20,890 yuan/mt, with open interest down 9,239 lots to 193,581 lots.

Aluminium ingot and billet inventory both dropped this week. And there are more evidences that primary aluminium supply would pick up. The market shall watch the recovery of demand after the pandemic.

Lead: The most-traded SHFE 2206 lead closed up 1.72% or 265 yuan/mt at 15,695 yuan/mt, with open interest down 6,211 lots to 48,048 lots.

The supply side is expected to recovery slowly due to the pandemic, while the downstream demand was also weak in light of seasonal low and transportation restrictions. Furthermore, lead concentrate imports have been low, and domestic TCs were also kept at a low level.

Zinc: The most-traded SHFE 2206 zinc closed up 0.83% or 230 yuan/mt at 27,950 yuan/mt, with open interest down 1,824 lots to 121,951 lots.

SMM zinc ingot social inventory dropped 7,000 mt amid recovered arrivals. Spot transactions were thin as pre-holiday restocking has basically finished and zinc prices rose again.

Tin: The most-traded SHFE 2206 tin closed up 1.63% or 5,290 yuan/mt at 330,080 yuan/mt, with open interest down 501 lots to 28,696 lots.

In the spot market, players reported thin orders with the imminent of Labour Day holiday. According to SMM research, the average operating rate of smelters stood at 62.62%, down 0.63 percentage point from a week ago, which was flat as a whole. Downstream solder companies’ operating rates averaged 87.55% in April, up 4.92 percentage points MoM. SHFE warrants added 36 mt to 1,434 mt, but dropped 911 mt in the past week. SHFE tin inventory fell 785 mt on the whole this week, while LME tin inventory rose 150 mt to 3,030 mt during April 25 – 28.

Nickel: The most-traded SHFE 2206 nickel closed up 2.16% or 4,920 yuan/mt at 232,230 yuan/mt, with open interest up 2,077 lots to 54,145 lots.

SHFE nickel rallied mainly due to news from the macro front today. Domestic supply tightness remained. Nickel salt plants were still in losses after LME nickel surged, and sluggish downstream demand in the stainless steel sector also aggravated this situation.  

[Disclaimer: The above representation and data is based on market information SMM believes to be reliable at the time of acquiring as well as the comprehensive assessment by SMM research team, and any and all information provided in this article is for reference only. This article does not constitute a direct recommendation for investment or any decisions in any form and clients shall act on their own discreet and any decisions made by clients are not within the responsibility of SMM.]