SMM Morning Comments (Apr 20): Shanghai base metals mixed; China keeps benchmark lending rate unchanged

SHANGHAI, Apr 20 (SMM) — Shanghai base metals set for a mixed start on Tuesday morning.

China on Tuesday kept the one-year loan prime rate (LPR) unchanged at 3.85% and five-year LPR at 4.65%. 

Shanghai base metals fell for the most part in overnight trading. Copper shed 0.79%, zinc weakened 0.64%, nickel slid 0.8% and tin dropped 1.29%, while aluminium added 0.42% and lead rose 1.06%. 

The LME complex closed mixed on Monday. Copper rose 1.52%, lead increased 1.08% and tin added 0.11%, while aluminium shed 0.39%, zinc edged down 0.16% and nickel dropped 0.37%. 

Copper: Three-month LME copper rose 1.52% to close at $9,322/mt on Monday, While the most-traded SHFE 2106 copper contract ended 0.79% lower at 69,110 yuan/mt in overnight trading.  The dollar slumped to a six-week low against major peers on Monday, with Treasury yields near their lowest in five weeks, after the U.S. Federal Reserve reiterated its view that any spike in inflation was likely to be temporary. LME copper is expected to trade between $9,320-9,400/mt today, and SHFE copper between 69,000-69,500 yuan/mt, while spot copper will be traded between discounts of 160-60 yuan/mt.

Aluminium: Three-month LME aluminium shed 0.39% to settle at $2,330/mt on Monday. LME aluminium is likely to move between $2,300-2,350/mt today.

The most-active SHFE 06 aluminium contract closed 0.42% firmer at 18,140 yuan/mt in overnight trading, and is likely to trade between 17,900-18,200 yuan/mt today.

Zinc: Three-month LME zinc weakened 0.16% to end at $2,853.5/mt on Monday, with open interest losing 433 lots to 250,000 lots. Zinc stocks across LME-listed warehouses shrank by 775 mt or 0.26% to 294,025 mt.  LME zinc is expected to fluctuate between $2,840-2,890/mt today.

The most-liquid SHFE 2106 zinc contract dropped 0.64% to settle at 21,740 yuan/mt in overnight trading, with open interest adding 2,633 lots to 62,507 lots. The June contract is likely to move between 21,500-22,000 yuan/mt today, while spot discounts for domestic 0# Shuangyan will be seen at 20-30 yuan/mt against the May contract.

Nickel: Three-month LME nickel slipped 0.37% to end at $16,120/mt on Monday, with open interest losing 318 lots to 219,000 lots.

The most-traded SHFE 2106 nickel contract slid 0.8% to close at 120,990 yuan/mt in overnight trading, with open interest rising 3,993 lots to 171,000 lots.

Lead: Three-month LME lead rose 1.08% to settle at $2,058/mt on Monday, posting a six-day winning streak, and whether the contract could steady above the 60-day moving average today will be monitored. 

The most-liquid SHFE 2105 lead contract advanced 1.06% to close at 15,225 yuan/mt in overnight trading. Maintenance across primary lead smelters and environmental inspections on secondary lead smelters will lend support to SHFE lead. Whether the contract could steady above the 15,200 mark will be watched.

Tin: Three-month LME tin added 0.11% to end at $26,600/mt on Monday, with open interest losing 73 lots to 12,502 lots. LME tin is expected to move between $26,000-27,000/mt today.

The most-active SHFE 2106 tin contract settled 1.29% weaker at 182,820 yuan/mt in overnight trading, with open interest adding 305 lots to 35,170 lots. It is expected to fluctuate between 180,000-188,000 yuan/mt today.