SMM Evening Comments (Apr 12)

SHANGHAI, Apr 12 (SMM) – SHFE nonferrous metals, except for aluminium, extended their declines on Friday April 12. Nickel led the losses and slid 2.16%, lead dropped over 1%, tin fell 0.22%, zinc dropped 0.2%, and copper dipped 0.16%. 

The ferrous complex ended higher as coke gained 1.27%, iron ore grew 0.69%, rebar jumped 0.56%, hot-rolled coil increased 0.41%, and coking coal rose 0.34%. 

Copper: The most-active SHFE June contract stood firm above the 20-day moving average and the Bollinger middle band, supported by exiting shorts and a higher LME copper. It ended at 49,280 yuan/mt, after it rose to a high of 49,340 yuan/mt, with open interests down 984 lots to 186,000 lots. We expect it to test support at the 49,400 yuan/mt level tonight. 

Aluminium: Chinalco’s bauxite train accident grew risk aversion among shorts and pulled up the most-liquid SHFE May contract. It climbed to a high of 13,855 yuan/mt in early trades and traded rangebound before it settled at 13,840 yuan/mt. Open interests lost 2,824 lots to 222,000 lots. SMM retains its optimistic outlook on prices tonight. 

Zinc: The SHFE June contract found support at the 20-day moving average after shorts dragged it to a low of 22,185 yuan/mt right after opening. It rebounded but stemmed increases at the daily moving average. A stronger LME zinc buoyed it near closing and settled it at 22,335 yuan/mt. Open interests grew 7,862 lots to 242,000 lots. Upbeat social financing data in China and a robust LME zinc may bolster the contract above the five- and 10-day moving averages tonight. 

Nickel: The SHFE June contract traded weakly with resistance from 101,000 yuan/mt today. It tested support below at 100,000 yuan/mt twice, with an intraday low of 100,390 yuan/mt. The contract closed at 100,800 yuan/mt, with open interests up 17,000 lots to 207,000 lots. We expect it to continue to test support at 100,000 yuan/mt tonight. 

Lead: Pressure from the 16,360 yuan/mt level kept the SHFE 1905 contract below the daily moving average today. The contract closed at 16,345 yuan/mt with open interests down 830 lots. Pessimism across investors may expand upward room in the contract tonight, unless a higher LME lead provides support.  

Tin: The SHFE May contract traded rangebound after opened at 146,710 yuan/mt, and jumped swiftly to close at 147,100 yuan/mt as shorts left. Open interests shrank 426 lots to 16,364 lots. It remained below all moving averages. We see it trading with support at 146,000 yuan/mt and resistance at 147,500 yuan/mt tonight.