SMM Evening Comments (Apr 10): Shanghai base metals rose across the board on macro optimism

SHANGHAI, Apr 10 (SMM) – SHFE nonferrous metals closed higher across the board on Friday, with tin leading the gains and adding 3.44%. 

Market sentiment was lifted after China's Ministry of Commerce announced on Friday to exempt the interest for tax delay for processing trades from April to year-end and pledged to unveil more policies to support business operations.

Beijing has already rolled out a series of fiscal and monetary support steps to shore up the world’s second-largest economy.

Copper advanced 2.33%, aluminium increased 1.76%, lead climbed 0.99%, zinc rose 0.26%, and nickel went up 2.32%. 

The ferrous complex also traded higher as iron ore increased 1.81%, rebar climbed 2.43%, hot-rolled coil added 2.3%, stainless steel ended up 1.71%, and coke gained 2.46%.

The LME will be closed next Monday for Easter Monday.

Copper: The most-liquid SHFE May contract jumped to an intraday high of 41,820 yuan/mt in the afternoon session amid aggressively loaded-up long positions. It ended up 2.33% on the day at 41,790 yuan/mt. Concerns about ore supply intensified after Global miner BHP confirmed two cases of coronavirus at its Escondida copper mine in Chile, the world´s largest. Macro optimism also lifted copper prices as governments and central banks around the world have stepped up efforts to boost liquidity to counter the economic impact from the coronavirus. The SHFE contract is expected to test 42,000 yuan/mt and regain losses from the prior two weeks. 

Zinc: The most-traded SHFE June contract increased with strong support from loaded-up longs, closing up 0.26% on the day at 15,660 yuan/mt, with open interests up 2,616 lots to 87,487 lots. Supply concerns on the mining front will continue to support the prospects for zinc prices. Pressure above from 16,000 yuan/mt will be monitored. 

Nickel: The most-traded SHFE June contract broke up the Bollinger middle band and hit a session high of 97,840 yuan/mt, ending up 2.32% on the day at 97,310 yuan/mt on the back of rising long positions. The momentum of longs and pressure from the 40-day moving average will be watched. 

Lead: The most-liquid SHFE May contract extended its rangebound trend around the daily moving average before a broad rally of base metals buoyed it to a session high of 13,910 yuan/mt and ended it at 13,835 yuan/mt, up 0.99% on the day. On fundamentals, the supply of battery scrap remained tight and this may limit the output increase of secondary lead. 

Tin: The most-traded SHFE June contract closed 3.44% higher on the day at 126,410 yuan/mt after a buildup of longs sent it to an intraday high of 126,750 yuan/mt. With support from the five-day moving average, the contract may face pressure from 127,000 yuan/mt.