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Metals Today: Base Metals Surge on Strong Chinese Trade Data

8 Mar 2021 9:34 am
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Mumbai Commodities Control - Base metals are trading higher on both LME and SHFE as investors reacted to last week's US jobs report that beat the expectations and fueled hopes for a faster economic recovery.

LME Copper is up by 0.36%; lead up by 0.15%; zinc up by 0.43%; nickel up by 1.36% and aluminium up by 0.97%.

SHFE base metals are also advancing the gains. SHFE Copper is up by 2.50%; lead down by 1.23%; zinc up by 1.56%, nickel up by 2.00% and aluminium up by 1.68% in early Asian trading hours.

The U.S. has reported a rise in non-farm payrolls in February by 379,000 against a prior month addition of 49,000 and much better than market expectation of 200,000.

An unemployment rate reduced to 6.2% in February from 6.3% in January.

Non-farm payroll and unemployment rate data is showing that the United States labor market condition is improving.

Copper

Copper is extending its gains on Monday backed by strong demand from the world's largest consumer i.e., China.

LME 3-M contract is trading above $9000 per ton while SHFE near-month contract is trading at CNY 66750 per ton.

Chinese trade surplus increased to $676 billion in February from $517 billion in January.

The nonfarm data far exceeded expectations, which boosted the prospects of economic recovery.

The market hoped that Biden would launch a 1.9 trillion stimulus plan, and investors' confidence in sustained economic recovery helped keep copper futures at a high level.

Copper stocks at LME registered warehouse fell to 79025 tons on Friday from 79825 tons on Thursday.

SHFE copper stocks rose by 15067 tons to 163025 tons.

MCX copper is likely to resume its uptrend to move towards Rs. 720 per kg this week.

Lead

Lead is trading on a steady note on LME while SHFE lead is trading down.

US employment data improved slightly, the market generally expressed disappointment with Powell's speech, as it did not show its intention to curb the long-term rise in the yield of US bonds.

LME lead is trading at $2012 per ton while SHFE lead is trading at CNY 14850 per ton.

Lead stocks at LME registered warehouse fell to 94150 tons on Friday from 94325 ton on Thursday.

SHFE lead inventories rose by 4072 tons to 44702 tons last week.

MCX lead is projected to trade in the range of Rs. 160 – Rs. 168 per kg.

Zinc

LME 3-M zinc contract is trading on a steady note while SHFE zinc is also showing a positive trend.

Last Friday, the market panic caused by the soaring US debt eased and the nonferrous metals stopped falling to a certain extent.

Last week, with the gradual recovery of downstream consumption, the domestic social stocks of zinc ingots took the lead in decreasing, which formed a strong support for zinc prices.

LME 3-M zinc contract is trading at $2774 per ton and SHFE near-month contract is trading at CNY 21100 per ton.

Zinc stocks at LME registered warehouse fell to 268775 tons on Friday from 269100 tons on Thursday.

SHFE zinc inventories rose by 3321 tons to 118305 tons last week.

MCX zinc is projected to trade in the range of Rs. 215 – Rs. 225 per kg.

Nickel

LME 3-M nickel steadied on Monday recovering from a 3-month low made last week.

Recovery in the entire base metals complex is adding support to the nickel market.

According to Shanghai Metal Market, nickel ore inventories across all Chinese ports decreased 161,000 tons from February 26 to 7.1 million tons as of March 5.

LME 3-M nickel is trading at $16402 per ton while SHFE near-month contract is trading at CNY 124150 per ton.

Nickel stocks at LME registered warehouse fell to 260376 tons on Friday from 260994 tons on Thursday.

SHFE nickel inventories fell by 1913 tons to 11393 tons last week.

MCX nickel is projected to trade in the range of Rs. 1180 – Rs. 1220 per kg.

Aluminium

Aluminium is advancing the gains on both LME and SHFE on robust demand from aluminium intensive sectors.

With surge in copper price to multi-year highs, the demand for aluminium is increasing from electricity sector across the world.

LME 3-M aluminium contract is trading at $2194 per ton and SHFE near-month contract is trading at CNY 17505 per ton.

Aluminium stocks at LME registered warehouse fell to 1299150 tons on Friday from 1304075 tons Thursday.

SHFE aluminium inventories rose by 16254 tons to 350694 tons last week.

MCX aluminium is projected trade in the range of Rs. 174 – Rs. 180 per kg.



       
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