SMM Evening Comments (Apr 29)

SHANGHAI, Apr 29 (SMM) – SHFE nonferrous metals, except for copper, closed higher on Monday. Lead saw the biggest gain of 1.1%, tin rose close to 1%, zinc and nickel advanced some 0.8%, and aluminium gained 0.2%.

The ferrous complex rose across the board. Iron ore jumped 2.3%, rebar climbed close to 1.2%, hot-rolled coil increased by 1.1%, coke gained 0.8%, and coking coal crept up 0.2%,

Copper: The most active SHFE June contract relinquished Friday night gains to close the trading day marginally lower at 48,850 yuan/mt. Spreads between May-October contracts remained in contango. SHFE copper is likely to struggle to remain above 48,800 yuan/mt tonight with negative signals from MACD indicators.

Aluminium: The most traded SHFE June contract reversed Friday night losses to finish the trading day 0.21% higher at 14,225 yuan/mt. SMM data showed that social inventories of primary aluminium in China continued to fall and declined 43,000 mt over the weekend, likely driven by improving consumption and pre-holiday stockpiling. SHFE aluminium is expected to consolidate at highs in the short run and trade between 14,200-14,300 yuan/mt tonight.

Zinc: As shorts took profits, the most active SHFE June contract recovered from earlier losses to end the trading day 0.84% higher at 21,720 yuan/mt. The five- and 60-day moving averages came closer to each other, which is likely to offer some support to prices. SMM data showed that social inventories of refined zinc across Shanghai, Tianjin and Guangdong continued to fall over the weekend, and this is likely to deter shorts from buying. SHFE zinc is expected to hover around the 40-day moving average tonight.

Lead: The most active SHFE June contract finished the trading day 1.12% higher at 16,710 yuan/mt after hitting a 2.5-week high of 16,780 yuan/mt in early morning trade. The buildup of long positions primarily accounted for the gains. SHFE lead is expected to trade rangebound around 16,700 yuan/mt tonight.

Nickel: A decline in the US dollar bolstered the most traded SHFE June contract to close the trading day 0.77% higher at 98,460 yuan/mt, extending Friday night’s gains. SHFE nickel is expected to rise to test the 10-day moving average tonight.

Tin: The most traded SHFE September contract extended Friday night gains to close the trading day 0.98% higher at 148,020 yuan/mt. This helped SHFE tin return above the five- and 10-day moving averages. Today’s gains could be attributed to the unwinding of short positions and a pick-up in China’s industrial profits. Resistance is seen at 149,000 yuan/mt.