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SMM Morning Comment For SHFE Base Metals On Apr 3

iconApr 3, 2024 10:11
LME copper prices opened at $9018/mt overnight and closed at $9011/mt last evening, up 1.57%, with the high-end of $9044/mt and the low-end of $8981/mt.



LME copper prices opened at $9018/mt overnight and closed at $9011/mt last evening, up 1.57%, with the high-end of $9044/mt and the low-end of $8981/mt. Trading volume were 26,000 lots and open interest stood at 309,000 lots. The most active SHFE 2405 copper contract prices opened at 73500 yuan/mt and finished at 73310 yuan/mt last Friday evening, up 0.29%, with the low-end of 73230 yuan/mt and the high-end of 73630 yuan/mt. Trading volume was 34,000 lots, and open interest stood at 174,000 lots. On the macro level, the former "hawkish" U.S. Cleveland Fed President Loretta Mester said that there will be three interest rate cuts this year, and a rate cut in June is likely to occur, which is bullish for copper prices. Domestically, the Ministry of Finance stated that in the first two months of this year, 575.9 billion yuan of new local government bonds were issued nationwide. In terms of fundamentals, from the supply side, there is still a large amount of supply in the hands of suppliers. Yesterday, they lowered prices to increase shipments. Although the enthusiasm of downstream companies to accept goods has increased, it has not changed the situation of oversupply. In terms of consumption, downstream began to stock up for the Qingming Festival holiday this week. However, as copper prices continue to rise, there is a certain suppression on purchasing. It is expected that the demand for stockpiling will be released on the last day before the holiday. Copper prices continue to rise due to the influence of macro sentiment at home and abroad, but the room for growth is relatively limited.


Overnight, the most-traded SHFE 2405 aluminum contract opened at 19,885 yuan/mt, with its lowest and highest at 19,810 yuan/mt and 19,885 yuan/mt before closing at 19,860 yuan/mt, up 115 yuan/mt or 0.58%. LME aluminum opened at $2,342/mt in the previous trading day, with its high and low at $2,387.5/mt and $2,332/mt respectively before closing at $2,372/mt, up $35/mt or 1.5%.

Summary: On the macro level, Fed officials made dovish remarks, but economic data continued to perform well, further confirming the expectation that the Fed is not in a hurry to cut interest rates. Recently, the domestic manufacturing industry returned to the expansion terriotory, and the policy side once again made efforts to promote the development of domestic new energy vehicles and lay a solid foundation for downstream consumption. Fundamentally, due to the increase in the arrival of aluminum ingots in Wuxi, the destocking performance is not stable. However, the rigid demands of downstream enterprises gradually showed resilience. The operating rate improved and maintained an upward trend in April, which provided good support for aluminum prices.


LME lead opened at $2050/mt overnight and fell by 1.56% to close at $2021/mt with highest at $2054.5/mt and the lowest point at $2011/mt.

The most active 2405 lead contract prices opened at 16490 yuan/mt last night with the low-end of 16395 yuan/mt, and closed at 16395 yuan/mt, a decrease of 0.27%.


Overnight, LME zinc opened at US$ 2,459 /ton and fell to as low as US$ 2,447/ton. During European trading hours, bulls increased their positions, and LME zinc quickly rose to a high of US$ 2,521.5 /ton, and finally closed up at US$ 2,478.5 /ton, up 41.5 US dollars/ton, or 1.07%. Trading volume increased to 16,411 lots, and open interest increased by 4,621 lots to 243,000 lots. LME zinc inventory dropped by 350 mt or 0.13% to 270525 mt. The rebound in manufacturing data in the United States and China boosted buying, but the Fed's interest rate cut was less than expected, weighing on LME zinc. LME zinc is expected to stabilize.

Overnight, the most active SHFE 2405 zinc contract opened at 21,230 yuan/ton and reached a high of 21,280 yuan/ton with a low of 21,175 yuan/ton. It finally closed down at 21,190 yuan/ton, down 40 yuan/ton, or 0.16%. The trading volume decreased to 43,213 lots and open interest decreased by 3,051 lots to 87,021 lots. SHFE zinc is expected to fluctuate around 21,000 yuan/ton today.


Overnight, SHFE 2405 tin contract moved downwards after opening higher, closing at 227,350 yuan/mt, down 0.16%.

Yesterday, spot premiums and discounts in domestic spot market for various tin ingot brands were as below. Small brand tin ingots were offered at discounts of 800-1,400 yuan/mt for SHFE 2405 tin contract, versus discounts of 0-800 yuan/mt for delivery brands, premiums of 0-200 yuan/mt for Yunxi brand, and discounts of 1,600 yuan/mt for imported brand tin ingots. Tin prices moved rangbound yesterday, leaving downstream companies on the sidelines. Few deals were heard among traders.


Overnight, the most-traded SHFE nickel contract opened at 130,850 yuan/mt, and closed at 132,590 yuan/mt, up 990 yuan/mt. Trading volume rose by 27,498 lots to 253,352 lots, and open interest decreased by 5,634 lots to 102,183 lots. The most-traded SHFE nickel contract rebounded after a lower opening. After falling to the intraday low of 130,840 yuan/mt, it closed up 1.96%.

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