SMM Evening Comments (May 15): Shanghai base metals marginally higher as investors weighed China data

SHANGHAI, May 15 (SMM) – SHFE nonferrous metals mostly posted marginal rebounds of less than 1% on Friday, following a broad decline Thursday. Official data on Friday showed that China's industrial production rebounded in April, boosted by the government's steps to promote work resumption, but investment and consumption continued to fall from a year earlier.

Aluminium was the best performer with a rise of 0.92%. Copper added 0.28%, lead increased 0.83%, zinc edged up 0.09%, while tin shed 0.5% and nickel lost 1.61%. 

The ferrous complex also traded mostly higher as iron ore gained 3.33% on bullish prospects for demand. Rebar rose 0.2%, hot-rolled coil grew 0.63%, coke rebounded 1.51%, while stainless steel eased 0.45%. 

China’s industrial output rose 3.9% in April year on year, improving from a 1.1% fall in March, the National Bureau of Statistics said Friday. 

Fixed-asset investment fell 10.3% in the January-April period, compared to a 16.1% drop in the first quarter. Retail sales slipped 7.5% in April, better than a 15.8% decline in March but still lower than the expected drop of 7%.

Oil futures continued its rally on Friday, ending growth for the third consecutive week, driven by hopes that production cuts and easing coronavirus-related restrictions will help to achieve a balance of demand and supply in the market.

Copper: The most-traded SHFE June contract traded higher with the rally in crude oil prices, climbing to a session high of 43,320 yuan/mt and finished 0.28% higher on the day at 43,130 yuan/mt. With support from the 20- and 60- day moving averages, the contract may continue to test pressure above tonight. The SHFE May contract finished its last trading day Friday with the settlement price at 43,190 yuan/mt and delivery volume of 21,525 mt. 

Aluminium: The most-liquid SHFE July contract climbed for the third consecutive day as it moved above the 60-day moving average and closed at 12,600 yuan/mt, up 0.92% on the day, following an intraday high of 12,635 yuan/mt. It is expected to continue to test its upside room tonight. The SHFE May contract ended today with a settlement price of 13,035 yuan/mt, with 68,250 mt of cargoes delivered. 

Zinc: The most-active SHFE July contract snapped a four-day losing streak as loaded-up longs lifted the contract and settled it at 16,465 yuan/mt, up 0.09% on the day. Zinc inventories in China resumed their decline this week, as demand recovered after prices slipped. The contract will continue to see support from the 40-day moving average. The SHFE May contract ended its last trading day with the settlement price at 16,490 yuan/mt. The delivery volume stood at 14,625 mt. 

Nickel: The most-traded SHFE July contract hovered rangebound today, extending the loss from overnight and closing at 99,400 yuan/mt, down 1.61% on the day. The SHFE May contract settled at 100,260 yuan/mt on its last trading day. 

Lead: The most-active SHFE June contract regained losses from the prior two days, rising to as high as 13,980 yuan/mt today and closed at 13,940 yuan/mt, up 0.83% on the day. Firm prices of battery scrap and low inventories at primary smelters will keep lead prices underpinned, but the possibility of a significant rise will be limited. The SHFE May contract settled the day at 13,860 yuan/mt with 300 mt of cargoes delivered. 

Tin: The most-liquid SHFE contract increased after falling, ending the day 0.5% lower at 129,240 yuan/mt. Support below is seen from 127,000 yuan/mt. The SHFE May contract finished its last trading day with a settlement price of 133,900 yuan/mt.