Shanghai base metals were mostly lower on Thursday morning amid renewed concerns over the global economic recovery outlook and a surge of Covid infections. Meanwhile, their counterparts on the LME traded mixed.

Shanghai base metals, expect for copper and aluminium, closed lower on Wednesday night. Aluminium, the best performer, added 0.88%, and copper rose 0.11%, while zinc weakened 0.78%, lead slid 0.69%, nickel fell 0.48% and tin declined 1.13%.

The LME complex closed mixed in overnight trading. Zinc slid 1.08%, tin declined 1.54% and lead weakened 0.92%, while aluminium climbed 1.54%, copper rose 0.2% and nickel increased 0.87%.

Copper: Three-month LME copper rose 0.2% to end at $8,889/mt on Wednesday, and is likely to trade between $8,850-8,930/mt today.

The most-active SHFE 2105 copper contract went up 0.11% to close at 66,550 yuan/mt in overnight trading, and it is expected to move between 66,300-68,000 yuan/mt today, while spot discounts will be seen at 110–60 yuan/mt.

Federal Reserve Chairman Powell reiterated his confidence in the U.S. labor market and played down the impact of rising bond yields on the market. According to the economic data released by the US last night, the preliminary Markit Service PMI stood at 60 in March, the highest since August 2014, and it was the eighth consecutive month of expansion. Although the preliminary Markit manufacturing PMI in March was not as expected, it was still in expansion. Optimistic expectations of sustained economic recovery in the market helped copper futures to rise slightly, but on the other hand, the weak data of durable goods orders in the US caused the market to worry about demand. Under the risk aversion, the US dollar index rose to a four-month high in late trading, which dragged down copper prices to a certain extent.

Aluminium: Three-month LME aluminium rose 1.54% to close at $2,248/mt on Wednesday. It is expected that the contract will trade between $2,230-2,260/mt today. 

The most-liquid SHFE 2105 aluminium contract rose 0.88% to settle at 17,210 yuan/mt on Wednesday night, and is likely to trade between 17,000-17,300 yuan/mt today. Yesterday, it was reported that a giant container ship ran aground in Suez Canal, which caused the two-way traffic of one of the busiest maritime trade routes in the world to be blocked. As an important international waterway, Suez Canal connects the Mediterranean Sea with the Red Sea, providing the nearest route from Europe to the land near the Indian Ocean and the western Pacific Ocean. However, the latest news from the port manager GAC indicates that the blockage of the canal may soon recover, and it is expected that the impact will be small.

Zinc: Three-month LME zinc fell 1.08% to close at $2,842/mt on Wednesday. Zinc stocks at LME-listed warehouses rose 7,975 mt to 271,350 mt. Overnight, the yield of US dollar and US debt rose collectively, the Suez Canal continued to be blocked, the import and export of Europe was blocked, and durable goods orders unexpectedly fell in February, which suppressed market confidence. The contract is likely to trade between $2,780-2,830/mt today.

The most-liquid SHFE 2105 zinc contract fell 0.78% to end at 21,570 yuan/mt in overnight trading. With the high prices of steel and zinc ingot, the galvanising orders have not improved obviously. The SHFE zinc contract is expected to move between 21,300-21,800 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be seen higher at 20-30 yuan/mt.

Nickel: The most-active SHFE 2106 nickel contract fell 0.48% to close at 121,410 yuan/mt on Wednesday. Open interests rose 1,119 lots to 145,000 lots. LME nickel briquette stocks had a continuous downward trend in the past two days. Recently, driven by the fundamentals of nickel price correction, the decrease of nickel briquette stocks should be monitored. The number of US initial jobless claims as of March 20 will be monitored today.

Lead: Three-month LME lead settled 0.92% lower at $1,933/mt on Wednesday. The US dollar index was on the strong side, and the market was worried about the pandemic situation in Europe, China-US relations, possible future tax increase in the US. Risk aversion may put upward pressure on commodities, and the support from $1930/mt will be monitored.

The most-active SHFE 2105 lead contract went down 0.69% to close at 15,080 yuan/mt on Wednesday night. The contract will test support from 20-day moving average today.

Tin: Three-month LME tin closed down 1.54% at $25,210/mt on Wednesday. Federal Reserve Chairman Powell said that the rise in US bond yields reflected investors' confidence in vaccination progress and economic growth, and the trend of yields has always been orderly. The US government made a strong financial response, and its actions were appropriate. Affected by macro factors such as the US dollar, the trend of the contract will be under pressure in the near term. Pressure above will be seen from $26,000/mt today. Support below will be seen from $25,000/mt today.

The most-liquid SHFE 2105 tin contract fell 0.12% at 173,110 yuan/mt on Wednesday night. Affected by the decline of LME tin and the recent domestic downstream consumption being less than expected, the contract weakened under inventory pressure, and it is expected that the contract will keep fluctuating in the near term. Pressure above will be seen from 180,000 yuan/mt today. Support below will be seen from 170,000 yuan/mt today.