SMM Evening Comments (Apr 10)

SHANGHAI, Apr 10 (SMM) – SHFE nonferrous metals mostly ended lower on Wednesday April 10. Lead led the losses and slid over 1%, zinc lost almost 1%, tin fell 0.38%, copper edged down, while aluminium and nickel gained over 0.4%. 

The ferrous complex also declined for the most part as coke and coking coal dropped over 2%, and iron ore went down slightly. Rebar grew 0.43%, and hot-rolled coil ended slightly higher. 

Copper: The most-traded SHFE June contract rebounded from a low of 49,500 yuan/mt around noon, driven by its higher LME counterpart. The contract failed to break pressure from the daily moving average and ended 0.1% lower on the day at 49,570 yuan/mt. Support from the five-day moving average remained, but potential bearish signs from the KDJ indicators may see it testing support at 49,500 yuan/mt tonight. 

Aluminium: The recovery of demand continued to buoy aluminium prices, as the most-liquid SHFE May contract climbed to an intraday high of 13,865 yuan/mt and ended 0.47% higher at 13,850 yuan/mt. Open interests across all SHFE aluminium contacts shrank 4,746 lots as shorts exited. While downstream operations were slow in Guangdong, processors in the Yangtze River Delta region and in the north returned as expected. Higher demand may continue to keep prices robust tonight. 

Zinc: The most-active SHFE June contract traded around the daily moving average today. Resistance from the five- and 10-day moving averages prevented it from exceeding 22,740 yuan/mt. It lost gains from early trades as it declined and closed at 22,305 yuan/mt. Expectations of higher supplies will keep the contract trading weakly with pressure from the 10-day moving average tonight.  

Nickel: As shorts left, the SHFE 1906 contract rebounded swiftly after dipped to an intraday low of 102,620 yuan/mt. Support from the five-day moving average kept it around the daily moving average, before it ended 0.43% higher at 103,310 yuan/mt. As the KDJ indicators expanded upwards and the MACD red line lengthened, the contract is expected to test support at the five-day moving average tonight. 

Lead: As base metals mostly weakened, shorts entered and dragged the SHFE 1905 contract to a low of 16,665 yuan/mt near closing. It ended at 16,685 yuan/mt, with open interests up 2,758 lots to 43,708 lots. A weaker LME lead may further lower the contract tonight. 

Tin: The SHFE May contract rebounded from 147,900 yuan/mt, but failed to extend increases at around 148,200 yuan/mt as longs exited. It closed at 147,820 yuan/mt after it fell to the lowest today at 147,720 yuan/mt. Open interests lost 1,834 lots. While the 40-day moving average weighed on the contract, support remained at the 20-day moving average. Support is expected at 147,500 yuan/mt tonight.