SMM Evening Comments (Apr 17)

SHANGHAI, Apr 17 (SMM) – SHFE nonferrous metals decreased for the most part on Wednesday April 17 as zinc led the losses and dropped 2.02%. Tin fell 0.3%, nickel lost 0.21%, lead went flat, while aluminium rose 0.9%, and copper grew 0.22%.

The ferrous complex also declined mostly as iron ore slid 3.8%, coke dipped 0.2%, rebar fell 0.18%, while coking coal gained 0.42%, and hot-rolled coil nudged up. 

Copper: The most-active SHFE June contract extended its increase from the morning, as a higher LME copper encouraged longs. The contract ceased growth at a high of 49,700 yuan/mt and closed at 49,510 yuan/mt. Open interests accumulated 7,148 lots to 192,000 lots. As the five- and 40-day moving averages provided support and the J-indicator expanded upwards, the contract is likely to break pressure at 49,700 yuan/mt tonight.  

Aluminium: China’s upbeat economic data for the first quarter bolstered the most-traded SHFE June contract, which climbed to a high of 14,005 yuan/mt and ended at 13,990 yuan/mt. Open interests across all SHFE aluminium contracts grew 38,382 lots with longs accounting for the most. As the MACD red line lengthened and the KDJ indicators expanded upwards, the June contract may continue to rise and test pressure at 14,000 yuan/mt tonight. 

Zinc: The most-liquid SHFE June contract registered the second consecutive trading day of decline as it fell below the 40-day moving average and the Bollinger middle band. While its LME counterpart pulled it up from below the daily moving average around noon, departing longs dragged it to close at 21,785 yuan/mt. Open interests grew 13,300 lots to 269,000 lots as shorts entered. Technical pressure is likely to keep the contract around the 40-day moving average tonight. 

Nickel: The SHFE June contract found support at 101,000 yuan/mt after it fell from a high of 101,650 yuan/mt in early trades. A weaker US dollar failed to pull it above the daily moving average, before it ended at 100,990 yuan/mt. Open interests increased 1,000 lots to 233,000 lots. As the MACD green line lengthened, and the KDJ indicators expanded downwards, the contract is likely to test support at 101,000 yuan/mt tonight. 

Lead: The most-active SHFE June contract hovered above the daily moving average, at 16,490 yuan/mt in the morning, with an intraday high of 16,520 yuan/mt. However, a buildup of shorts and exiting longs from noon depressed its momentum and settled it at 16,440 yuan/mt. We expect it to trade rangebound with pressure at 16,500 yuan/mt tonight. 

Tin: The most-liquid SHFE September contract rebounded from an intraday low of 148,260 yuan/mt at noon, and closed at 148,490 yuan/mt. Resistance above from 150,000 yuan/mt kept it at lows today. Support is set at 148,000 yuan/mt tonight.