SMM Evening Comments (Apr 23)

SHANGHAI, Apr 23 (SMM) – SHFE nonferrous metals ended mixed on Tuesday April 23 as aluminium increased 0.35%, tin grew 0.13%, zinc nudged up, while nickel lost 1.21%, copper slid 0.45%, and lead dropped 0.12%. 

The ferrous complex, except for coking coal, closed lower as hot-rolled coil dipped 0.86%, rebar declined 0.69%, iron ore decreased 0.55%, and coke dropped 0.12%.

Copper: Buoyed by a higher LME copper, the most-liquid SHFE June contract climbed in the morning but stemmed its increase at 49,200 yuan/mt around noon. Exiting longs dragged it to an intraday low of 49,080 yuan/mt, before it closed at 49,160 yuan/mt. Open interests shrank 994 lots to 187,000 lots, while open interests across all SHFE copper contracts lost 4,264 lots to 518,000 lots. This caused an outflow of some 87.98 million yuan of capital across SHFE copper contracts, the greatest across base metals. The June contract is expected to test support at 49,000 yuan/mt tonight. 

Aluminium: Expanding longs pulled the most-traded SHFE June contract to an intraday high of 14,230 yuan/mt in early trades. It failed to break pressure from 14,230 yuan/mt and slid in the afternoon as shorts entered, settling at 14,170 yuan/mt. Open interests increased 5,610 lots to 320,000 lots. We expect it to trade below pressure at the 14,200 yuan/mt level tonight. 

Zinc: The SHFE 1906 contract found support at 21,610 yuan/mt and rebounded to test pressure from the daily moving average at noon. As market pessimism eased, the contract rose to a high of 21,710 yuan/mt before it ended at 21,680 yuan/mt. Resistance remained at the five-day moving average. Slow trades in the spot market may cap any upward room in the contract tonight. It is expected to trade around the five-day moving average tonight. 

Nickel: The most-active SHFE June contract consolidated around 98,500 yuan/mt with pressure from 98,700 yuan/mt and support from 98,200 yuan/mt today. It led the losses among base metals as it closed 1.21% lower on the day at 98,440 yuan/mt. Open interests expanded 9,000 lots to 296,000 lots as shorts entered. This led to an influx of 205 million yuan of capital across all SHFE nickel contracts, topping base metals. As the MACD green line lengthened and the KDJ indicators expanded downwards, the June contract may test support at 98,000 yuan/mt tonight. 

Lead: The most-active SHFE June contract lost upward momentum as it hovered around 16,495 yuan/mt today and ended 0.12% lower on the day at 16,500 yuan/mt. As the five-day moving average also moved downwards and LME lead weakened, the contract is likely to fall below support at the five-day moving average tonight. 

Tin: The most-liquid September contract traded rangebound at lows before departing shorts pulled it to a high of 148,300 yuan/mt near closing. Pressure from the five-day moving average settled it at 148,100 yuan/mt. Open interests shrank 272 lots to 30,258 lots. We see it trading with support at 147,500 yuan/mt and resistance at 149,500 yuan/mt tonight.