SMM Morning Comment For SHFE Base Metals On Apr 10

SHANGHAI, Apr 10 (SMM) –

Copper

LME copper prices opened at $9467/mt and closed at $9427/mt last evening, down 0.17%, with the highest of $9523/mt and the lowest of $9380/mt. The trading volume was 34,000 lots, and open interest stood at 323,000 lots. The most active SHFE 2406 copper contract prices opened at 76720 yuan/mt and finished at 76430 yuan/mt last evening, up 0.17%, with the low-end of 76060 yuan/mt and the high-end of 77040 yuan/mt. Trading volume was 84,000 lots, and open interest stood at 198,000 lots. Atlanta Fed President Bostic reiterated his expectation of one rate cut this year. In addition, the Israeli president reiterated that nothing can stop the action to eliminate Hamas, and Iran's counterattack may have entered the countdown, and the risk of intensified conflict has escalated again. Before the release of US inflation data, the US dollar index performed weakly, which bolstered copper prices. In terms of fundamentals, from the supply side, there has been a certain increase in domestic goods arrivals. In terms of consumption, the widening of the price spread between front-month and next-month contracts and the approaching delivery have led to a slight increase in transaction volume, but terminal consumption is still sluggish and the downstream desire to replenish stocks has rarely improved. Overall, inventories may continue to rise. On the whole, the weak performance of the US dollar has given copper prices additional impetus, and it is unlikely to see a decline in the short term.

Aluminum

Overnight, the most-traded SHFE 2406 aluminum contract opened at 20,280 yuan/mt, with the highest and lowest prices at 20,500 yuan/mt and 20,215 yuan/mt before closing at 20,290 yuan/mt, up 60 yuan/mt or 0.3%. LME aluminum opened at $2,460/mt in the previous trading day, with its high and low at $2,470/mt and $2,437/mt respectively before closing at $2,458.5/mt, up $1/mt or 0.04%.

Summary: On the macro level, the US dollar moved rangebound overnight, and investors were cautious ahead of the release of US inflation data on Wednesday. The domestic aluminum operating capacity was recovering slowly. Downstream operating rate continued to rise, but high prices may suppress downstream procurement enthusiasm, and spot discounts sustained. Overall, aluminum prices stayed at highs due to growing expectations of US economic recovery and positive fundamentals, and may swing on a strong note. We need to pay attention to US inflation data, impact of high prices on downstream procurement and aluminium ingot destocking.

Lead

Overnight, LME lead opened at US$2137.5/ton. Amid the interest rate cut remarks by former Federal Reserve officials, the US dollar index continued to weaken, non-ferrous metal sectors generally rose, and LME lead also showed an upward trend throughout the day. During the European period, lead inventories continued to destock, and LME lead prices even climbed to $2,165/mt. The contract closed at $2162/mt, up 1.22%.

The most active SHFE 2405 lead opened at 16640 yuan/mt and reached a high of 16715 yuan/mt, and finally closed at 16660 yuan/mt, up 0.54%. Open interest decreased 601 lots to 45549 lots. The 2406 contract may turn into the most active contract in the next few days.

Zinc

Overnight, Fed Chairman Bostic reiterated that he expects one rate cut this year; EIA significantly lowered its forecast for global crude oil demand growth this year; Iranian proxies are said to be launching attacks on Israel in the coming days; the Bank of Japan is reportedly considering raising its inflation forecast this month; the total asset management scale of global gold ETFs increased significantly in March; the Ministry of Industry and Information Technology and six other departments: promote the in-depth application of new technologies such as artificial intelligence in the manufacturing process; a number of securities firms lowered the annual interest rate on customer margin demand deposits to 0.2%; China's new energy vehicle sales in March increased by 29.5% year-on-year; Guangzhou stopped approving new residential projects such as apartments.

LME zinc opened at US$2,674/ton and during European trading hours reached a low of US$2,636/ton. Then it bottomed out and rebounded quickly, reaching a high of US$2,727/ton. The contract closed up at US$2,711/ton, up US$43/ton, or 1.61%. LME zinc inventory decreased by 200 mt or 0.08% to 259925 mt, supporting LME zinc prices.

The most-traded SHFE 2405 zinc contract opened at 22040 yuan/mt overnight and touched a low of 22000 yuan/mt before closing at 22325 yuan/mt, up 485 yuan/mt or 2.22%. Trading volume fell to 76142 lots, and jumped on open interest decreased by 885 lots to 75523 lots.

Tin

Overnight, SHFE 2405 tin contract moved up after opening higher, and continued to move sideways at highs before closing at 246,940 yuan/mt, up 3.63%.

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 800-1,500 yuan/mt for SHFE 2405 tin contract, versus discounts of 0-800 yuan/mt for delivery brands and premiums of 0-300 yuan/mt for Yunxi brand. In the early trading yesterday, SHFE tin prices swung on a soft note but remained high, leaving downstream companies on the sidelines. Some downstream companies restocked as needed. Few deals were heard among traders.

Nickel

Overnight, the most-traded SHFE nickel contract opened at 137,630 yuan/mt, and closed at 137,090 yuan/mt, up 470 yuan/mt compared with the last trading day. Trading volume increased by 32,962 lots to 222,839 lots, and open interest decreased by 4,638 lots to 85,742 lots. The most-traded SHFE nickel contract fluctuated downward to the lowest point of 135,680 yuan/mt after opening, and rebounded gradually, with the final increase of 0.85%.