SMM Morning Comment For SHFE Base Metals On Apr 25

SHANGHAI, Apr 25 (SMM) –

Copper

LME copper prices opened at $9794.5/mt and closed 0.64% higher at $9790/mt overnight, with the low-end of $9758.5/mt and the high-end of $9843/mt. Trading volume was 23,000 lots, and open interest stood at 335,000 lots. The most active SHFE 2102 contract prices opened at 79250 yuan/mt and closed at 79230 yuan/mt last evening, up 0.74%, with the high-end of 79690 yuan/mt and the low-end of 78930 yuan/mt. Trading volumes stood at 64,000 lots and open interest stood at 198,000 lots. Concerns about mine supply continue to provide support for copper prices. In addition, Ukrainian drones hit two Russian oil reserves, Israel said it was ready to launch Operation Rafah immediately and had already struck Hezbollah in southern Lebanon. Geopolitical conflicts also pushed up copper prices to a certain extent. The supply remains sufficient. In terms of consumption, the rebound in copper prices has caused spot trading to remain sluggish, and it is difficult to see any increase in downstream replenishment. If copper prices remain stable, consumption may improve. On the whole, the capital level remains strong, and copper prices are expected to rise in the near future. At the same time, Blinken has arrived in Shanghai, and we need to pay attention to the progress of the meeting between the two sides.

Aluminum

Overnight, the most-traded SHFE 2406 aluminum contract opened at 20,280 yuan/mt, with its lowest and highest at 20,230 yuan/mt and 20,335 yuan/mt before closing at 20,280 yuan/mt, up 130 yuan/mt or 0.65 %. LME aluminum opened at $2,580/mt in the previous trading day, with its high and low at $2,614.5/mt and $2,563/mt respectively before closing at $2,584/mt, up $8/mt or 0.31%.

On the macro front, the market is waiting for the US Personal Consumption Expenditure (PCE) price index report to be released on Friday for clues on the prospects for US interest rate cuts. Risky assets and non-US monetary experienced an increase in volatility. The UK and the US imposed sanctions on Russian metals again, and Biden called for a 25% tariff on China’s aluminum semis, triggering turbulence in global metals market. The domestic aluminum supply rose further, but downstream demand dragged down inventories, supporting aluminum prices. The domestic market prices may fluctuate at a high level amid global aluminum trade friction.

Lead

Last evening, LME lead price opened at US$2182.5/ton and hit a high of US$2209/ton, and finally closed at US$2202.5/ton, an increase of 0.85%.

The most traded SHFE 2406 lead contract opened at 17095 yuan/mt and rose 0.50% to close at 17090 yuan/mt after briefly hitting a high point at 17145 yuan/mt and the lowest point at 17035 yuan/mt.

Zinc

Overnight, LME zinc opened at $2795/mt, hitting a low and high of $2783/mt and $2838/mt respectively, and closed higher at $2794.5/mt. Trading volume decreased to 8967 lots, and open interest decreased 285 lots to 244,000 lots. LME zinc inventory dropped by 750 mt or 0.29% to 255100 mt. The 2.6% month-on-month growth in U.S. durable goods orders in March was basically in line with expectations. The rise in the U.S. dollar index again suppressed zinc prices. We will pay attention to the U.S. economic data to be released later this week.

The most active SHFE 2406 zinc contract prices opened at 22565 yuan/mt and gained 25 yuan/mt or 0.11% at 22490 yuan/mt, with the high-end of 22640 yuan/mt and the low-end of 22445 yuan/mt. Trading volumes decreased to 81995 lots and then interest grew 50 lots to 109,000 lots. Demand remains weak. It is expected that the subsequent upward space for SHFE zinc may be limited.

Tin

SHFE 2405 tin contract rebounded slightly after opening lower, closing at 254,570 yuan/mt, up 0.53%.

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 600-1,400 yuan/mt for SHFE 2405 tin contract, versus discounts of 0-1,000 yuan/mt for delivery brands and premiums of 200-400 yuan/mt for Yunxi brand. In yesterday's early trading, SHFE 2405 tin contract remained stable. After a short period of wait-and-see, downstream companies purchased only as needed and stocked up in small quantities.

Nickel

On April 24, the most-traded SHFE nickel contract opened at 139,970 yuan/mt, and closed at 142,990 yuan/mt, up 2,020 yuan/mt compared with the last trading day. Trading volume fell by 165,098 lots to 307,135 lots, and open interest decreased by 3,882 lots to 100,172 lots. The most-traded SHFE nickel contract fluctuated upward after opening and then fell slightly, with the highest at 143,360 yuan/mt and the final decrease of 0.68%.