SMM Evening Comments (Apr 24)

SHANGHAI, Apr 24 (SMM) – SHFE nonferrous metals, except for tin, ended lower on Wednesday April 24. Zinc led the losses and fell 1.78%, lead slid 1.15%, nickel fell nearly 1%, and copper and aluminium dropped 0.39%. 

The ferrous complex closed mixed as coking coal rose over 1%, coke advanced 0.34%, iron ore fell 1.59%, rebar dropped 1.24%, and hot-rolled coil lost nearly 1%. 

Copper: The most-liquid SHFE June contract rebounded after a lower LME copper dragged it below the daily moving average to an intraday low of 48,930 yuan/mt. It ceased its increase at 49,080 yuan/mt as shorts entered at that level and weighed it to close at 48,960 yuan/mt. As it lost support at the Bollinger middle band and the MACD indicators moved downwards, the contract is likely to test support at 48,900 yuan/mt tonight. 

Aluminium: A lack of confidence across longs saw the most-active SHFE 1906 contract decline after it rose fast to an intraday high of 14,195 yuan/mt after opening. It traded rangebound and closed at 14,140 yuan/mt, with open interests down 4,350 lots to 316,000 lots. Expectations of a supply surplus for the third quarter grew shorts across the SHFE August, September, and October contracts, and this accumulated 17,000 lots across SHFE aluminium contracts. We see limited downside room in the June contract, which may trade between 14,100-14,200 yuan/mt tonight. 

Zinc: Expectations of greater supplies, together with pressure from the five- and 60-day moving averages dragged the most-traded SHFE 1906 contract below the daily moving average, to a low of 21,260 yuan/mt. It closed at 21,270 yuan/mt, with open interests up 15,022 lots to 301,000 lots as shorts entered. We expect it to trade weakly below the 60-day moving average tonight. 

Nickel: The most-active SHFE June contract traded weakly in the morning before departing shorts bolstered it to a high of 98,030 yuan/mt around noon. However, a loss of longs depressed the upward momentum and ended the contract at 97,590 yuan/mt. Open interests shrank 12,000 lots to 284,000 lots. As the MACD green line lengthened, the contract is expected to test support at 97,000 yuan/mt tonight. 

Lead: Expanding shorts kept the most-liquid SHFE June contract below the daily moving average, with an intraday low of 16,340 yuan/mt near closing. It ended 1.15% lower on the day at 16,345 yuan/mt, with open interests up 1,874 lots to 56,398 lots. Pressure from shorts is likely to extend losses of the contract tonight. 

Tin: The most-active SHFE September contract rebounded swiftly after it dropped to an intraday low of 147,230 yuan/mt after opening. Longs pulled it to close 0.03% higher on the day at 147,820 yuan/mt, while the other base metals weakened. Open interests grew 6,598 lots to 31,182 lots. As pressure from the five-day moving average remained, the contract is likely to trade rangebound with support at 147,000 yuan/mt tonight.