SMM Morning Comments (Mar 30): Shanghai base metals were mostly higher following the ship that blocked the Suez Canal being free

SHANGHAI, Mar 30 (SMM) — Shanghai base metals were mostly higher on Tuesday morning, and their counterparts on the LME mostly cruised lower as gains were capped by concerns over a third wave of the coronavirus hitting the continent.

The Ever Given was pulled free from the Suez Canal on Monday after cutting off traffic in the vital waterway for six days, but experts say the disruptions to global trade will continue to reverberate.

“We might celebrate the success of releasing the ship and unblocking the Suez, but that’s not the end of the story here,” said Douglas Kent, executive vice president of strategy and alliances at the Association for Supply Chain Management.

Shanghai base metals mostly advanced in overnight trading. Copper increased 0.02%, lead rose 1.82%, tin went up 0.21% and zinc strengthened 0.62%, while aluminium fell 0.14% and nickel weakened 0.1%.

The LME complex ended mostly lower on Monday. Nickel edged down 1.18%, zinc weakened 0.09%, aluminium lost 1.07% and copper shed 0.93%, while lead rose 0.77% and tin added 0.1%.

Copper: Three-month LME copper fell 0.79% to end at $8879/mt on Monday, and is likely to trade between $8,860-8,950/mt today.

The most-active SHFE 2105 copper contract went up 0.2% to close at 66,470 yuan/mt in overnight trading, and it is expected to move between 66,100-66,600 yuan/mt today, while spot premiums will be seen at 120–70 yuan/mt.

The COVID-19 in the US deteriorated, and the number of infections, hospitalisations and deaths all accelerated. The Biden administration called on States to slow down the relaxation of pandemic prevention measures. The Ever Given was successfully detached from the shallow water, and the Suez Canal vessels gradually resumed passage. Last night, the US dollar index hit 92.965 in intraday trading, hitting a new high since November last year. The strong US dollar and rising US bond yields put pressure on copper futures. In terms of spot, the month-end settlement period was entered in the week, and the orders under long-term contracts basically ended this month. It is difficult to see the initiative in trade transactions, and the market is in a seesaw situation as a whole.

Aluminium: Three-month LME aluminium remained unchanged to close at $2,273.5/mt on Monday. It is expected to trade between $2,240-2,280/mt today.

The most-liquid SHFE 2105 aluminium contract rose 0.11% to settle at 17,425 yuan/mt on Monday night, and is likely to trade between 17,200-17,600 yuan/mt today. The impact of market selling news on the market should be monitored today.

Zinc: Three-month LME zinc fell 0.09% to close at $2,828/mt on Monday. Zinc stocks at LME-listed warehouses fell 50 mt to 271,050 mt. The US dollar index hit a new high in more than four months in volatile trading, and the rising yield of US bonds also suppressed LME zinc. Combined with overseas pandemic fermentation, causing market sentiment to fluctuate. However, the Biden administration will push forward the $3 trillion infrastructure plan this week, which is expected to boost the trend of Lunzn. The contract is likely to trade between $2,800-2,850/mt today.

The most-liquid SHFE 2105 zinc contract rose 0.62% to end at 21,890 yuan/mt in overnight trading. The US will announce trillions of infrastructure plans this week to boost market confidence, and the social inventories continued to decrease, which will once again boost bullish confidence and support the upward trend of zinc prices. It is expected that zinc prices will still fluctuate strongly in the near term. The SHFE zinc contract is expected to move between 21,500-22,000 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be seen higher at 30-40 yuan/mt.

Nickel: The most-active SHFE 2106 nickel contract fell 0.1% to close at 123,170 yuan/mt on Monday. Open interests rose 468 lots to 137,000 lots. LME nickel briquette stocks declined slowly but continuously. Recently, nickel prices may still fluctuate mainly, but compared with the previous weak fluctuation trend, it may turn into a stronger fluctuation.

Lead: Three-month LME lead settled 0.77% higher at $1,970/mt on Monday. Whether the contract could continue the long positions market and continue to challenge the target position of the 20-day moving average will be monitored today.

The most-active SHFE 2105 lead contract went up 1.82% to close at 15,345 yuan/mt on Monday night. Recently, the spot market tends to be weak in trading volume. In the case of high lead prices, the influence of the selling value of the holders on the trend of SHFE lead should be monitored, and the contract will test support of from 40-day moving average today.

Tin: Three-month LME tin closed up 0.1% at $25,325/mt on Monday. After the container ships that blocked the shipping of Suez Canal resurfaced, people's worries about the rising freight rate subsided, and the rising dollar strengthened the negative sentiment. The contract is expected to keep fluctuating in the near term. Pressure above will be seen from $26,000 /mt today. Support below will be seen from $25,000/mt today.

The most-liquid SHFE 2105 tin contract fell 0.03% to close at 175,250 yuan/mt on Monday night. Domestic inventory pressure suppressed SHFE tin. It is expected that the contract will keep fluctuating in the near term. Pressure above will be seen from 180,000 yuan/mt today. Support below will be seen from 170,000 yuan/mt today.