SMM Evening Comments (Apr 22)

SHANGHAI, Apr 22 (SMM) – SHFE nonferrous metals ended mixed on Monday April 22 as aluminium increased some 0.9%, lead rose nearly 0.6%, zinc jumped 0.5%, while tin lost 0.2%, copper fell almost 0.3%, and nickel slid 0.5%. 

The ferrous complex closed higher as rebar led the increases and advanced 1.6%. Iron ore rose 1.3%, hot-rolled coil grew 1.2%, coking coal went up 0.6%, and coke nudged up. 

Copper: As the share market fell, the most-active SHFE June contract dropped below the Bollinger middle band, but found support at the 20-day moving average and stemmed declines at 49,110 yuan/mt near closing. It ended 0.28% lower on the day at 49,250 yuan/mt. Open interests expanded 336 lots to 189,000 lots as shorts entered. Tonight, the contract is likely to test support at 49,000 yuan/mt. 

Aluminium: A buildup of 4,662 lots of long positions in open interests during 15 minutes after opening, bolstered the most-liquid SHFE June contract. It extended the increase in the afternoon to a high of 14,200 yuan/mt and closed at 14,190 yuan/mt. Open interests grew steeply by 28,000 lots to 315,000 lots. Late resumption of downstream demand in Guangdong lowered social inventories of primary aluminium. This, coupled with a rebound in prices of alumina, is expected to keep the contract robust and testing the 14,200 yuan/mt level tonight. 

Zinc: With support at the 60-day moving average, the most-traded SHFE 1906 contract bounced at a low of 21,535 yuan/mt and tested pressure from the 40-day moving average as continued depletion in social inventories grew confidence in longs. Technical pressure ended the contract at 21,655 yuan/mt, after it rose to a high of 21,675 yuan/mt. We see it trading rangebound between the 40- and 60-day moving averages tonight. 

Nickel: The SHFE 1906 contract lost gains from last Friday as growing shorts dragged it to an intraday low of 98,490 yuan/mt, before it closed at 98,550 yuan/mt. As its KDJ indicators expanded downwards and the MACD green line lengthened, it is expected to test support at 98,000 yuan/mt tonight. 

Lead: News of maintenance across primary smelters bolstered the SHFE 1906 contract, and pulled it to a high of 16,580 yuan/mt as shorts exited near closing. It ended at 16,575 yuan/mt, with open interests down 2,726 lots to 50,890 lots. As the five-day moving average moved upwards, the contract is likely to rise further tonight. Pressure above will remain from the 20-day moving average. 

Tin: Accumulated shorts lowered the most-liquid September contract to an intraday low of 147,510 yuan/mt, before it closed at 147,560 yuan/mt. Open interests expanded 1,484 lots to 30,530 lots. The contract is likely to receive support at 147,500 yuan/mt in the short term. It will test the 147,000 yuan/mt level if it fell below support at 147,500 yuan/mt.