SMM Evening Comments (Feb 25): Shanghai nonferrous metals rose across the board, aluminium surged 5.05%

SHANGHAI, Feb 25 (SMM) – SHFE nonferrous metals closed higher across the board on Thursday February 22, as global markets jumped following reassuring comments from Federal Reserve Chairman Jerome Powell on the inflation outlook.

Aluminium was the best performer with a rise of 5.05%. Copper surged 3.63%, tin advanced 1.54%, nickel climbed 1.65%, zinc increased 1.05% and lead went up 0.45%.

The ferrous complex also rose across the board. Iron ore increased 1.39%, rebar rose 2.52%, and hot-rolled coil climbed 2.4%.

Copper: The most-traded SHFE 2104 copper contract finished the day 3.63% higher at 70,150 yuan/mt. Open interest rose 756 lots to 154,000 lots.

Federal Reserve Chairman Powell continued to downplay the risks of inflation and overheating economics in the House Hearing, stressing that signs of rising prices do not necessarily lead to persistent high inflation. The US House of Representatives issued a new text of the stimulus bill, adding three categories of expenditure, with the total amount exceeding the upper limit of $1.9 trillion. The plenary session of the House of Representatives will vote on the bill on Friday. It is expected that the Senate will make its own revision to the version of the House of Representatives. The market is confident that the stimulus bill will soon come to the ground, and the market sentiment remains high.

US Initial Jobless Claims and whether the trend of LME copper could continue to drive the SHFE copper will come under scrutiny tonight.

Aluminium: The most-liquid SHFE 2104 aluminium contract finished the day 5.05% higher at 17,480 yuan/mt. Open interest rose 17,377 lots to 225,621 lots. SMM data showed that aluminium billet stocks across the five major consumption areas — Foshan, Wuxi, Huzhou, Changzhou and Nanchang — in China built up 25,100 mt from a week ago to 239,300 mt as of Wednesday February 25.

Zinc: The most-active SHFE 2104 zinc contract climbed to an intraday high of 21,960 yuan/mt and closed up 1.05% at 21,675 yuan/mt. Open interest fell 4,349 lots to 72,785 lots. Overall consumption has not recovered. It is expected that the contract will fluctuate weakly tonight.

Nickel: The most-traded SHFE 2104 nickel contract ended the day 1.65% higher at 144,990 yuan/mt today. Open interest fell 8,537 lots to 145,594 lots. Recently, Meidy Katrin Lengkey, secretary general of the Indonesian Nickel Miners Association (APNI), said that the recovery of the COVID-19 vaccine and vaccination will improve nickel production and sales this year.

Lead: The most-traded SHFE 2104 lead contract slid to a session low of 15,630 yuan/mt and ended the day 0.45% higher at 15,775 yuan/mt. Open interest rose 4,345 lots to 44,498 lots.

Tin: The most-liquid SHFE 2104 tin contract fell to a session low of 187,700 yuan/mt and finished the day 1.54% higher at 191,790 yuan/mt today. Open interest fell 3,265 lots to 26,267 lots.