SMM Evening Comments (Apr 23)

Published: Apr 23, 2018 18:30

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SMM Evening Comments

SHANGHAI, Apr 23 (SMM) – Nonferrous metals saw mixed trading on Monday April 23. SHFE lead rose over 1% and copper gained close to 1%. Zinc and aluminium edged up slightly. Nickel and tin dipped.

The ferrous complex performed strongly across the board. Coke led with a gain of 3.87%, hot-rolled coil, coking coal and iron ore climbed over 2%. Rebar rose close to 2%.

Copper: As investors added their longs, the SHFE 1806 contract rose to a high of 52,050 yuan/mt today. It mostly traded above the day's moving averages. Technically, the contract stood between the 40- and 60- day moving averages with pressure at 52,000 yuan/mt. Support was seen at the five- and 10-day moving averages. It is likely to stand above 51,500 yuan/mt and test pressure above.

Aluminium: SHFE aluminium 1806 contract rose to a high of 15,055 yuan/mt at noon as trade conflicts eased during the weekend. We see the contract hover at high levels if no new development emerges from the US sanctions on Russia.

Zinc: The SHFE 1806 contract inched up with less brisk trades today. Despite shrinking inventories across major markets, most participants adopted a wait-and-watch stance due to a possible surge of supply in the near term. The contract is likely to hover at 24,500 yuan/mt if no guiding factor emerges.

Nickel: After it tested resistance from the five-day moving average today, the SHFE 1807 contract fell and hovered at 104,800 yuan/mt. We see support at the 10-day moving average tonight. Investors should take more cues from the US Markit Manufacturing Purchasing Managers Index (PMI) in April and pending home sales in March.

Lead: The SHFE 1806 contract led a gain across nonferrous metal today. It consolidated along the 18,420 yuan/mt level after it reached a high of 18,470 yuan/mt. We see support at the five- and 10-day moving averages and strong pressure at the 18,500 yuan/mt level. We expect SHFE lead to consolidate tonight.

Tin: While most base metals gained on a stronger ferrous metals performance, the SHFE 1809 contract dipped with pressure from shorts. As the 60- and five-day moving averages saw overlaps for three successive days, we see the contact likely to rebound in the short run.

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