SMM Evening Comments (Apr 15): Shanghai base metals mixed as IMF warned of severe global recession

SHANGHAI, Apr 15 (SMM) – SHFE nonferrous metals closed mixed on Wednesday, as the economic impact of the coronavirus pandemic continued to weigh on investor sentiment.

Lead was the worst performer with a 1.6% decline, copper fell 0.6%, zinc shed 0.3% and tin dipped 0.1%. Nickel advanced 0.5% and aluminium jumped 1.5%. The SHFE will keep its night trading session suspended.

As oil prices resumed their decline while the US index rallied, base metals on the LME drifted lower across the board after the European trading session kicked off, erasing gains from Tuesday’s rally and diving into the red. Copper was nearly 2% lower on the day as of 18:40 Beijing time.

The International Monetary Fund warned on Tuesday that the global economy is set to see its worst financial crisis since the Great Depression. The Washington-based organization now expects the global economy to contract by 3% in 2020. By contrast, in January it had forecast a global GDP (gross domestic product) expansion of 3.3% for this year.

Copper: The most-liquid SHFE June slipped to an intraday of 41,330 yuan/mt in early morning trade, before it clawed back some losses to close the day 0.55% lower at 41,560 yuan/mt.

The SHFE April contract finished its last trading day with settlement price of 41,730 yuan/mt.

Aluminium: The most-traded SHFE June contract hit its highest since March 20 at 12,015 yuan/mt in afternoon trade, before it ended the day 1.53% higher at 11,950 yuan/mt.

The SHFE April contract settled at 11,905 yuan/mt to finish its last trading day.

Zinc: Profit-taking forced the most-traded SHFE June contract to ease from a one-month high of 16,000 yuan/mt in afternoon trade and end in the red at 15,805 yuan/mt, down 0.32% on the day. With support from moving averages, SHFE zinc is likely to test 16,000 yuan/mt again.

The SHFE April contract finished its last trading day, also with an inverted V shape. It settled at 15,855 yuan/mt and 34,950 mt of cargoes were delivered.

Nickel: As longs aggressively loaded up positions, the most-traded SHFE June contract jumped above the 40-day moving average to a new four-week peak of 98,700 yuan/mt in afternoon trade. It later relinquished some gains to close the day 0.51% firmer at 97,240 yuan/mt, as some longs trimmed positions. Whether SHFE nickel could shrug off resistance at the 40-day moving average at 98,000 yuan/mt will come under scrutiny.

The SHFE April contract finished its last trading day with settlement price of 97,470 yuan/mt and 5,850 mt of cargoes were delivered.

Lead: The most-liquid SHFE June contract hovered around the daily moving average, failing to recover losses from a lower open, and finished the day 1.55% lower at 13,630 yuan/mt. SHFE lead has yet to move out of its recent range, with support sustained at 13,500 yuan/mt. Investors should closely watch supply of battery scrap, which will provide some clues on the pace of secondary lead production recovery.

The SHFE April contract wrapped up its trading with settlement price of 14,200 yuan/mt and 1,000 mt being delivered.

Tin: The most-traded SHFE June contract rose in the day, recovering some losses from a lower open, but failing to end in the green. SHFE tin dipped 0.13% on the day to close at 126,920 yuan/mt.