SMM Evening Comments (Apr 14): Shanghai base metals closed mostly higher on less worse than expected Chinese trade data

SHANGHAI, Apr 14 (SMM) – SHFE nonferrous metals closed mostly higher on Tuesday, as China’s trade data painted a less gloomy picture than markets had feared and signs of a slowdown in coronavirus infections and deaths raised hopes that the worst of the pandemic may be over.

Zinc jumped 1.2% on the day to be the biggest gainer among SHFE nonferrous metals, lead advanced 0.7%, nickel rose 0.3% and copper inched up 0.1%, while aluminium edged down 0.1% and tin fell 0.8%. The SHFE will keep its night trading session suspended.

Base metals on the LME drifted higher across the board in Asian trading hours, after returning from the Easter holidays. Tin, copper, zinc and nickel jumped more than 4%, 3%, 2% and 1%, respectively, to their highest in about four weeks, at $15,650/mt, $5,200/mt, $1,955/mt and $11,865/mt.

In dollar-denominated terms, China’s exports fell 6.6% in March from a year ago, while imports slipped 0.9% in the same month, data from the General Administration of Customs showed on Tuesday. Economists polled by Reuters had expected exports from China to fall 14% in March from a year ago, while imports were projected to fall 9.5% over the same period.

The US has begun plans to re-open its economy, and European countries, among those Italy and Spain that have been some of the worst affected by the coronavirus, are now looking to lift some restrictions on public life as the number of new infections and daily deaths has declined.

Copper: The most-liquid SHFE June wrapped up a volatile trading session to close 0.1% higher at 41,750 yuan/mt, holding onto four-week highs.

Aluminium: The most-traded SHFE June contract also boomeranged, ending the day 0.1% weaker at 11,770 yuan/mt.

Zinc: The most-traded SHFE June contract notched its highest since March 12 at 15,980 yuan/mt in early afternoon trade, before it erased some gains to close the day 1.2% higher at 15,900 yuan/mt. SHFE zinc has broken through the 40-day moving average and now sits near the 16,000 yuan/mt mark. The pandemic shock to supply and falling inventories in China are likely to help lift SHFE zinc above 16,000 yuan/mt.

Nickel: The most-traded SHFE June contract closed the day 0.3% higher at 97,160 yuan/mt after a wild trading session. It now faces pressure at 98,000 yuan/mt but continues to be supported by the middle Bollinger band.

Lead: The most-liquid SHFE June contract climbed to a four-week high of 13,945 yuan/mt in morning trade, before shorts knocked it to end the day 0.7% higher at 13,765 yuan/mt. With strong support from moving averages, SHFE lead is unlikely to see a consistent decline before there are tangible signs of oversupply.

Tin: The load-up of long positions lifted the most-traded SHFE June contract to a new four-week high of 128,880 yuan/mt in early morning trade, before the contract slipped to finish the day 0.8% lower at 126,370 yuan/mt. SHFE tin still sits around the 40-day moving average. Support is seen at the five-day moving average at 124,700 yuan/mt.