Shanghai base metals higher across the board on stimulus hope


SHFE nonferrous metals rose across the board on Friday, as market sentiment rallied after China’s Ministry of Finance pledged to make an early allocation of the special-purpose bond quotas for transportation infrastructure construction. To get more latest Shanghai news, you can visit shine news official website.

Zinc continued to lead the increase with a rise of 2.24%. Copper advanced 2.07%, aluminium added 1.67%, lead climbed 1.14%, tin rose 0.26%, and nickel increased 1.35%. The ferrous complex also traded higher as iron ore expanded 1.43%, rebar gained 0.76%, hot-rolled coil added 1.03%, stainless steel edged up 0.04%, and coke grew 0.25%. 

A Caixin survey on Friday showed that China’s services sector purchasing manager’s index (PMI) for March rebounded to 43 from 26.5 in February, beating expectations though still marking the second-lowest level since the survey began. 

February's reading was the lowest on record due to shop closures and public lockdowns amid the coronavirus outbreak.Copper: The most-traded SHFE May contract extended its increase from Thursday, rising to a session high of 39,980 yuan/mt and closed the day 2.07% higher at 39,930 yuan/mt. Spot copper trades were active on Friday on rising expectations of tax cut stimulus measures. Intensified concerns about ore supplies also supported copper prices, after Rio Tinto said it could not supply contracted copper to its customers due to force majeure factors. Moreover, Peru has extended a state of emergency and Mexico has declared national public health emergency amid the COVID-19 pandemic. The SHFE contract is expected to test support from 40,000 yuan/mt next week, with pressure expected from the 40-day moving average. 

Aluminium: The most-liquid SHFE June contract rebounded from a session low of 11,445 yuan/mt and closed the day 1.67% higher at 11,545 yuan/mt, trimming decline from the previous day. Social inventories of primary aluminium slowed their increase this week, but this does not suggest significantly resumption of demand. The market continues to await more supportive measures from the government and potential output cut at smelters. Trading range next week is seen between 11,400-11,900 yuan/mt.