SMM Evening Comments (Apr 4)

SHANGHAI, Apr 4 (SMM) – SHFE nonferrous metals and ferrous complex, except for SHFE tin, rose across the board on Thursday April 4. Zinc led the increases and closed 1.81% higher. Lead jumped 0.68%, copper rose 0.59%, aluminum and nickel grew 0.2%.

Hot-rolled coil advanced 1.24%, iron ore gained 1.1%, rebar climbed 0.59%, coke went up 0.4%, and coking coal rose 0.32%. 

Copper: The most-active SHFE May contract traded firm at the Bollinger middle band as it rebounded after slid to a low of 49,440 yuan/mt. Pressure from the 49,580 yuan/mt level settled it at 49,520 yuan/mt, with open interests up 1,878 lots to 183,000 lots. As the J-indicator showed signs of weakness, the contract may test support at the 49,500 yuan/mt in the near run. The SHFE will close tonight for the Qingming Festival holiday. 

Aluminium: The most-liquid SHFE May contract climbed to an intraday high of 13,845 yuan/mt after SMM data showed that China’s social inventories of primary aluminium lost 37,000 mt on the week. The contract returned to the daily moving average and ended at 13,805 yuan/mt. The MACD red line held steady and the KDJ indicators expanded upwards. 

Zinc: The SHFE May contract found support at 22,985 yuan/mt after it dropped twice in the morning. It rebounded to around the daily moving average, and closed at 23,095 yuan/mt. Investors cut both their longs and shorts ahead of the Qingming Festival holiday, and this led to a decline of 1,876 lots in open interests. Pressure was seen at the Bollinger upper band. 

Nickel: A lack of confidence in longs dragged the SHFE May contract from a high of 104,060 yuan/mt, as pressure from 104,000 yuan/mt lingered. While longs continued to leave in the afternoon, the decline in prices slowed from early trades. The contract closed slightly higher on the day at 102,850 yuan/mt. Some 245 million yuan of capitals flew out of all SHFE nickel contracts today, topping the base metals. 

Lead: The SHFE 1905 contract traded rangebound along the daily moving average today, with pressure from 16,925 yuan/mt and support at 16,825 yuan/mt. Strong support from the five- and 10- day moving averages and improved confidence in longs are likely to see the contract above the 10-day moving average. But it will be difficult to stand above the 17,000 yuan/mt level. 

Tin: The SHFE May contract extended decline from overnight, as it slid to an intraday low of 147,940 yuan/mt before noon. Exiting longs lowered the contract, and caused a decline of 470 lots in open interests. It ended 0.48% lower on the day at 148,160 yuan/mt. Resistance above is seen at 149,000 yuan/mt, with support at 147,500 yuan/mt.