SMM Evening Comments (Apr 30)

SHANGHAI, Apr 30 (SMM) – SHFE nonferrous metals closed mixed on the last trading day before Labour Day holiday. Zinc rose 0.9%, tin advanced close to 0.8%, copper gained 0.1% and aluminium inched up 0.04% while lead dipped 0.06% and nickel fell 0.2%.

The ferrous complex, except for coking coal, traded higher on the day. Hot-rolled coil increased by 2.5%, iron ore crept up 2.1%, rebar climbed 1.8%, and coke gained 0.8%.

The SHFE will close from tonight for the holiday and resume trades on Monday May 6.

Copper: Following the release of disappointing Chinese manufacturing PMI, the most active SHFE June contract relinquished overnight gains before it fluctuated to close the trading day 0.1% higher at 48,930 yuan/mt. Open interest for the contract shrank 9,052 lots to 178,288 lots as investors covered positions to avoid holding costs during the holiday.

Aluminium: The most active SHFE June contract traded in a tight range before it edged down to 14,160 yuan/mt. It finished the trading day marginally higher at 14,175 yuan/mt, with open interest shrinking 23,724 lots to 288,332 lots as pre-holiday risk aversion drove investors to cover positions. Guizhou Huaren New Materials’ primary aluminium project of 500,000 mt/year capacity reached full operation as of Monday April 29, and this met market expectations. The ratio of SHFE 1906 contract to the three-month LME aluminium has climbed to 7.75, which is set to weigh on SHFE aluminium prices.

Zinc: The most liquid SHFE June contract held onto most of its overnight gains to finish the trading day 0.9% higher at 21,845 yuan/mt. Its intraday high of 21,910 yuan/mt stood above the 40-day moving average and MACD lines will likely shape a golden cross, which suggesting eased bearish sentiment. Open interest for the contract shrank 10,894 lots to 258,882 lots

Nickel: The most traded SHFE June contract rebounded from an intraday low of 97,600 yuan/mt, touched in early morning trade, before it reversed those gains to end the trading day 0.24% lower at 97,810 yuan/mt. Its KDJ lines expanded downwards and MACD green bar shortened. Open interest for the contract declined 23,660 lots to 195,852 lots.

Lead: As shorts added and longs cut their positions, the most active SHFE June contract fell to lows of 16,650 yuan/mt before it recovered from much of those losses to close a touch lower at 16,685 yuan/mt. Longs appeared keen to take profits at the 16,700 yuan/mt level.

Tin: The most traded SHFE September contract climbed to end at an intraday high of 148,590 yuan/mt, up 0.75% on the day. Resistance is seen at 149,000 yuan/mt.