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Shanghai base metals rose across the board on fears Suez Canal blockage may last weeks

Mar 29 — Shanghai base metals all cruised higher on Monday morning on concerns that a large container ship that ran aground in the Suez Canal may block the vital shipping lane for weeks, squeezing supply. 

Shanghai base metals rose across the board last Friday night. Copper advanced 0.91%, aluminium added 0.6%, zinc rose 1.39%, nickel increased 1.47%, lead gained 0.47% and tin inched up 0.1%. 

The LME complex performed similarly. Copper increased 1.72%, aluminium advanced 0.78%, zinc strengthened 1.73%, nickel rose 1.48%, and lead and tin firmed 0.62%. 

Copper: Three-month LME copper rose 1.72% to close at $8,950/mt last Friday, while the most-traded SHFE 2015 copper contract added 0.91% to end at 66,770 yuan/mt last Friday night.

University of Michigan's consumer sentiment index rose to its highest level in a year in March. Recently, US President Joe Biden doubled his 100-day vaccination target to 200 million doses. The US government has stepped up its vaccination plan. The Federal Reserve will limit dividends of most Wall Street banks at the end of the second quarter, which boosted market sentiment. LME copper is expected to trade between $8,930-9010/mt today, and SHFE copper between 66,300-66,900 yuan/mt, while spot copper will be traded between discounts of 150-80 yuan/mt.

Aluminium: Three-month LME aluminium gained 0.78% to settle at $2,273.5/mt last Friday, and is expected to move between $2,240-2,270/mt today.

The most-liquid SHFE 2105 aluminium contract firmed 0.6% to close at 17,525 yuan/mt last Friday night, with open interest adding 4,653 lots to 226,000 lots. It is likely to trade between 17,400-17,700 yuan/mt today.

Zinc: Three-month LME zinc rose 1.73% to end at $2,828/mt last Friday, with open interest losing 2,947 lots to 233,000 lots. Zinc stocks across LME-listed warehouses dropped by 125 mt or 0.05% to 271,100 mt. LME zinc is expected to fluctuate between $2,790-2,840/mt today.

The most-active SHFE 2105 zinc contract increased 1.39% to settle at 21,830 yuan/mt last Friday night. Weekly treatment charges (TCs) for domestic zinc concentrate continued to fall last week, suggesting tight concentrate supply, and this, combined with production restrictions, prompted zinc smelters to reduce output. Meanwhile, downstream demand was strong, which weighed on zinc social inventories. The May contract is likely to move between 21,500-22,000 yuan/mt today, while spot discounts for domestic 0# Shuangyan will be seen at 20-30 yuan/mt against the April contract.

Nickel: The most-liquid SHFE 2106 nickel contract strengthened 1.47% to settle at 123,390 yuan/mt last Friday night, with open interest losing 1,347 lots to 134,000 lots.

Lead: Three-month LME lead advanced 0.62% to close at $1,949/mt last Friday. 

The most-traded SHFE 2105 lead contract rose 0.47% to end at 15,050 yuan/mt last Friday night.

Tin: Three-month LME tin settled 0.62% higher at $25,300/mt last Friday, and is expected to trade between $24,600-26,000/mt today.     

The most-active SHFE 2105 tin contract inched up 0.1% to settle at 174,840 yuan/mt last Friday night, with open interest decreasing 1,499 lots to 20,978 lots. It is likely to fluctuate between 168,000-180,000 yuan/mt today.

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