SMM Evening Comments (Apr 16)

SHANGHAI, Apr 16 (SMM) – SHFE nonferrous metals ended mixed on Tuesday April 16. Nickel and lead gained over 1%, aluminium nudged up, while zinc lost 1.73%, tin fell 0.5%, and copper went down slightly. 

The ferrous complex, except for coke, closed lower as iron ore led the losses and dropped 3.21%, hot-rolled coil and rebar dipped over 1%, and coking coal fell 0.34%. 

Copper: The most-active SHFE June contact traded around the five-, 10-, and 40-day moving averages today, with support at the Bollinger middle band. A higher LME copper bolstered it to a high of 49,660 yuan/mt before it ended at 49,480 yuan/mt. Open interests grew 2,098 lots to 184,000 lots as longs entered. We see it testing support at the 49,500 yuan/mt level tonight. 

Aluminium: The SHFE June contract became the most-active contract today, which rebounded from a low of 13,860 yuan/mt and closed at an intraday high of 13,910 yuan/mt, up 0.25% on the day. Open interests across all SHFE aluminium contracts shrank 63,082 lots to 616,000 lots, as shorts exited. Signs of a slower decline in alumina prices and expectations on higher consumption will expand upward room in the contract tonight. 

Zinc: A buildup in LME zinc inventories grew pessimism in the market and dragged on the most-traded SHFE June contract from above the daily moving average, to an intraday low of 22,080 yuan/mt near closing. With support from the Bollinger middle band, the contract closed at 22,095 yuan/mt. Open interests increased 18,300 lots to 256,000 lots as investors added their shorts. Tonight, it will test support at the Bollinger middle band. 

Nickel: A weakened US dollar extend the increase in the most-traded SHFE June contract in the afternoon, and bolstered it above all moving averages to a high of 102,520 yuan/mt. The contract closed 1.12% higher on the day at 102,270 yuan/mt. Some 259 million yuan of capitals flew into all SHFE nickel contracts, topping the base metals. As the MACD green line shortened, the June contract is likely to test support at the current level tonight. 

Lead: Longs pulled the most-active SHFE June contract above the five-day moving average, to a high of 16,530 yuan/mt, before the contract ended 1.13% higher on the day at 16,520 yuan/mt. Open interests continued to grow by 9,264 lots to 50,376 lots as investors bet on a rising market in June. The upward trend may continue tonight if its LME counterpart maintains robust. 

Tin: Departing longs lowered the most-liquid SHFE September contract to around the 148,800 yuan/mt level in the morning. The contract rebounded in the afternoon, to 149,100 yuan/mt, but pressure from the five-day moving average limited gains and settled it at 148,690 yuan/mt. It will trade rangebound with support at 148,000 yuan/mt and resistance at 150,000 yuan/mt tonight.