SMM Evening Comments (Mar 29)

SHANGHAI, Mar 29 (SMM) – SHFE nonferrous metals closed mixed on Friday. Tin and zinc rose some 1.2%, copper climbed 0.9% and aluminium gained 0.3% while nickel dipped 0.02% and lead fell 0.4%.

The ferrous complex, except for coking coal, traded higher. Iron ore saw the biggest gain of 3.5%, hot-rolled coil advanced 1.6%, rebar crept up 1.5%, and coke increased by 1.2%.

Copper: The most traded SHFE May contract climbed in the afternoon as shorts cut their positions on reported progress in trade negotiations between Washington and Beijing. It stood above the five- and 60-day moving averages and finished the trading day 0.93% higher at 48,800 yuan/mt. The contract is expected to try to break through 49,000 yuan/mt tonight.

Aluminium: The most active SHFE contract rebounded from earlier lows to close the trading day 0.26% higher at 13,730 yuan/mt. Temporary stable costs and recovering consumption kept SHFE aluminium robust. Traders are expected to take a wait-and-see stance in the last trading session before lower value-added taxes take effect next Monday. The contract is expected to trade rangebound above the 10-day moving average tonight.

Zinc: The most liquid SHFE May contract climbed to a new high of 22,745 yuan/mt during the day, ending 1.16% higher at 22,730 yuan/mt. This helped it stand above the upper Bollinger band. SMM data showed that social inventories of refined zinc across Shanghai, Guangdong and Tianjin declined 7,800 mt in the week ended March 29, reflecting upbeat fundamentals. The contract is expected to hang on above the upper Bollinger band tonight.

Nickel: The most liquid SHFE May contract recovered from overnight losses to an intraday high of 100,980 yuan/mt before it ended marginally lower at 100,600 yuan/mt. The spread between the May and June contracts remained in a backwardation structure, suggesting market concerns about a supply surge in the second quarter. Open interest for the June-September contracts expanded 14,000 lots on the day. The SHFE 1905 contract is expected to hover around the five-day moving average tonight. 

Lead: In contrast to the strengthening LME lead, the most active SHFE May contract weakened during the day, with pressure at 16,770 yuan/mt and support at 16,715 yuan/mt. The SHFE 1905 contract ended at 16,730 yuan/mt, down 0.39% on the day. It is expected to extend its losses tonight.

Tin: The most traded SHFE May contract rose to a three-week high of 148,850 yuan/mt in early morning trade and ended the trading day 1.24% higher at 148,090 yuan/mt. Short-covering primarily accounted for the gains in the contract on the day. Resistance is seen at 149,000 yuan/mt.