SMM Morning Comments (Apr 14): Shanghai base metals rose for the most part as dollar fell to three-week lows after inflation data

SHANGHAI, Apr 14 (SMM) — Nonferrous metals on the SHFE rose broadly on Wednesday morning as the US dollar dropped to three-week lows after US inflation data, while their counterparts on the LME set for a mixed start as investors weigh J&J Covid vaccine setback.

In overnight trading, Shanghai base metals, except for nickel and tin, closed higher. Copper gained 0.38%, aluminium rose 1.48%, zinc added 0.49% and lead firmed 1.02%, while nickel shed 0.43% and tin weakened 0.29%.  

The LME complex performed similarly on Tuesday. Copper advanced 0.26%, aluminium increased 1.65%, zinc gained 0.96% and lead firmed 0.25%, while nickel dropped 0.59% and tin slid 0.21%. 

Copper: Three-month LME copper gained 0.26% to close at $8,895/mt on Tuesday, while the most-traded SHFE 2106 copper contract added 0.38% to end at 66,180 yuan/mt in overnight trading.  US consumer price index jumped 0.6% last month, the largest gain since August 2012, after rising 0.4% in February, the Labor Department said on Tuesday. Excluding the volatile food and energy components, the CPI rose 0.3%. However, the rise was not expected to alter the Federal Reserve’s commitment to keeping interest rates at rock-bottom levels for years to come. The US dollar index fell to a three-week low, while copper futures rose slightly. LME copper is expected to trade between $8,880-8,960/mt today, and SHFE copper between 66,000-66,500 yuan/mt, while spot premiums will be seen at 20-90 yuan/mt.

Aluminium: The most-active SHFE 2105 aluminium contract rose 1.48% to close at a session high of 17,835/mt in overnight trading, with open interest adding 2,852 lots to 194,531 lots. Three-month LME aluminium settled 1.65% higher at $2,304.5/mt on Tuesday. SHFE aluminium is likely to move between 17,500-17,800 yuan/mt today, while LME aluminium between $2,270-2,320/mt.

Zinc: Three-month LME zinc ended 0.96% firmer at $2,786/mt on Tuesday, with open interest adding 1,210 lots to 244,000 lots. Zinc stocks across LME-listed warehouses surged by 16,100 mt or 5.71% to 298,025 mt.  LME zinc is likely to move between $2,750-2,800/mt today.

The most-liquid SHFE 2105 zinc contract advanced 0.49% to settle at 21,490 yuan/mt in overnight trading. The May contract is likely to move between 21,200-21,700 yuan/mt today, while spot discounts for domestic 0# Shuangyan will be seen at 10 yuan/mt against the contract.

Nickel: The most-traded SHFE 2106 nickel contract shed 0.43% to close at 121,430 yuan/mt in overnight trading.

Lead: Three-month LME lead cruised 0.25% higher to end at $1,985/mt on Tuesday. 

The most-active SHFE 2105 lead contract rose 1.02% to settle at 14,855 yuan/mt in overnight trading, and whether the contract could steady above the 14,800 mark today will be monitored.  

Tin: Three-month LME tin dropped 0.21% to close at $25,565/mt on Tuesday. LME tin is expected to move between $25,000-26,000/mt today.

The most-liquid SHFE 2106 tin contract weakened 0.29% to end at 177,450 yuan/mt in overnight trading, with open interest rising 1,030 lots to 32,190 lots. Weaker-than-expected demand and rising inventories may weigh on tin prices. SHFE tin is likely to fluctuate between 177,000-181,000 yuan/mt today.