SMM Evening Comments (May 10)

SHANGHAI, May 10 (SMM) – SHFE nonferrous metals closed mixed on Friday. Aluminium and nickel climbed about 1.2%, and copper gained 0.3% while zinc dipped 0.1%, tin lost close to 0.3% and lead fell 0.8%.

The ferrous complex traded higher across the board. Iron ore saw the biggest gain of 2.3%, coke rose 0.7%, rebar and hot-rolled coil advanced more than 0.5%, and coking coal inched up 0.1%.

Copper: The most active SHFE July contract extended overnight gains to an intraday high of 48,060 yuan/mt in early morning trade, likely bolstered by comments from the government last evening. With higher US tariffs kicking in at noon, the contract slipped before it recovered to end the trading day 0.27% higher at 47,760 yuan/mt. LME copper is likely to provide some direction for the Shanghai market tonight, with strength at the 47,700 yuan/mt level.

Aluminium: The most traded SHFE June contract rose during the day, finishing the trading day 1.21% higher at 14,170 yuan/mt. It fully recovered from Monday’s sharp loss and stood firmly above the middle Bollinger band. SHFE aluminium is expected to stay at highs tonight, with a trading range of 14,050-14,190 yuan/mt.

Zinc: The most active SHFE July contract rebounded to the 21,000 yuan/mt level shortly after its morning open, before the loading up of short positions forced the contract to relinquish those gains to close the trading day 0.1% lower at 20,830 yuan/mt. While SMM data showed that social inventories of refined zinc across Shanghai, Tianjin and Guangdong continued to fall, SHFE zinc is unlikely to rebound tonight and will likely trade under pressure from the five-day moving average as increased US tariffs dampen market sentiment.

Nickel: The most traded SHFE July contract climbed to an intraday high of 96,700 yuan/mt, as high as the 10-day moving average, in early morning trade. Later in the day, the looming tariff hike forced the contract to give up some gains before it recovered to end at 96,440 yuan/mt, up 1.15% on the day. SHFE nickel is expected to test the 10-day moving average tonight.

Lead: As longs covered positions to avoid further losses, the most active SHFE June contract weakened during the day and extended overnight losses to finish the trading day 0.8% lower at 16,155 yuan/mt. Two consecutive days of substantial losses steepened the downwards expanding five-day moving average. With this and a weak LME counterpart, SHFE lead is unlikely to rebound tonight.

Tin: As shorts cut their positions, the most traded SHFE September contract rose during the day, paring some of overnight losses to close the trading day 0.25% lower at 146,290 yuan/mt. Support is seen at 145,000 yuan/mt.