SMM Evening Comments (Apr 10)

SHANGHAI, Apr 10 (SMM)－Nonferrous metals closed higher across the board on Tuesday April 10 except for SHFE lead. Nickel rose close to 2%, copper gained over 1% and aluminium inched up close to 1%. Zinc and tin edged higher.

The ferrous complex also climbed, except for coking coal. Iron ore increased over 2%, hot-rolled coil gained 1.8%, rebar rose over 1% and coke edged up.

Copper: As shorts reduced their positions and prices of crude oil futures rose, the SHFE 1805 contract gained 1.2%. It struggled at the 20-day moving average with upward room and support from the five-day moving average. We expect it to test 58,000 yuan/mt and stand firmly above 51,000 yuan/mt tonight.

Aluminium: LME aluminium remained strong given the impact of US sanctions on Russian aluminium. SHFE aluminium inched up to 14,350 yuan/mt today. Driven by the rising cost of aluminium in China, SHFE aluminium has further room to rise in the short term. We see it facing pressure in the mid term due to limited orders from downstream producers in April and May.

Zinc: The SHFE 1806 contract traded rangebound around 24,475 yuan/mt in the morning and moved along the 24,530 yuan/mt level in the afternoon. SHFE zinc received a boost later and closed higher as consumption recovered and destocking surpressed shorts. We expect SHFE zinc to remain rangebound tonight.

Nickel: SHFE nickel traded rangebound today and closed at 100,930 yuan/mt after it gained 250 yuan/mt. It is likely to test pressure from 40-day moving average tonight. From the US, the month-on-month data for the Producer Price Index (PPI) in March is likely to give guidance to the market tonight.

Tin: Supported by the SHFE's strong performance today, SHFE tin registered a 50 yuan/mt increase to close at 144,650 yuan/mt. With downward pressure, tin is expected to trade rangebound in the short term with pressure from 146,200 yuan/mt and support from 143,700 yuan/mt.

Lead: SHFE lead closed at 18,490 yuan/mt after it saw an outflow of 25.25 million yuan. After declining for four consecutive days, lead traded with resistance from all averages. We see it testing upper pressure at 18,500 yuan/mt tonight. 

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