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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copper aluminium lead zinc tin nickel

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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