SMM Evening Comments (Apr 17)

Published: Apr 17, 2018 18:21

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SMM Evening Comments

SHANGHAI, Apr 17 (SMM) – Nonferrous metals received a boost on Tuesday April 17 as China's gross domestic product (GDP) for the first quarter came in along expectations. SHFE aluminium surged 2.4% and tin and lead rose over 1%. Copper and zinc gained close to 1%, and nickel edged up.

Most ferrous metals came off from highs and closed with mixed results. Coke rose over 1% and coking coal and hot-rolled coil inched up slightly. Iron ore dropped 1.57% and rebar slipped 0.56%.

Copper: Prices gained support as the US dollar index remained weak. The SHFE 1806 contract mostly hovered at moving averages during the day. Technically, it stood above the 20-day moving average and traded between the five- and 10-day moving averages. We see it trading rangebound tonight.

Aluminium: LME aluminium buoyed the SHFE 1806 contract in the afternoon to rebound to a high of 14,935 yuan/mt. This followed after the contract dipped to a low of 14,730 yuan/mt with pressure from shorts. The SHFE/LME price ratio is likely to fall further as LME aluminium continues to perform strongly in the short term. We expect the SHFE 1806 contract to hover at 15,000 yuan/mt tonight.

Zinc: The SHFE 1806 contract rose and met resistance at the five-day moving average during the day. As shorts and longs diverged, we see the contract continue its struggle to break upwards and expect it to consolidate along the lower Bollinger band tonight. Investors should also monitor the 1807 contract after it rose 16,000 lots in open interest during the day.

Nickel: Prices of the SHFE 1807 contract rose less today following a sharper increase yesterday. The contract gained support from the five-day moving average and closed at 103,800 yuan/mt. We see it hovering at high levels tonight. Investors will take cues from the US housing starts in March and industrial production.

Tin: The SHFE 1805 contract continued to rise and rebounded above the 10-day moving average during the day. We expect it to test the 40-day moving average and the 146,000 yuan/mt level tonight.

Lead: The SHFE 1806 contract moved under the moving averages during the day. We see limited upward room and expect it to trade rangebound tonight.

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copper aluminium nickel zinc lead tin

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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