SMM Evening Comments (Sep 11)

SHANGHAI, Sep 11 (SMM) – SHFE nonferrous metals ended with mixed performances on Tuesday. Nickel rose 0.65%, tin increased 0.64%, copper gained 0.52%, aluminium nudged up 0.07% while zinc and lead lost close to 1%.

The ferrous complex fell across the board. Coke slumped 4.9%, hot-rolled coil plunged 4.6%, rebar tumbled 4.3%, iron ore dropped 1.1% and coking coal slipped 0.5%.

Copper: As speculative shorts covered their positions and longs added their positions, the SHFE 1811 contract fell to an intraday low of 47,940 yuan/mt and closed at 47,910 yuan/mt. The contract managed to stand above the five-day moving average today and is likely to test the 10-day moving average tonight.

Aluminium: While the SHFE 1811 contract ended in the black and stood firmly above the five-day moving average, it closed lower than open prices today, with limited upward momentum. Weak downstream consumption and uncertainty over winter production cuts weighed on aluminium prices even as potential Rusal output cuts provided some support. We expect the contract to test the 20-day moving average tonight.

Zinc: The SHFE 1811 contract reversed losses made earlier today and stood above the 20-day moving average during the day. However, its KDJ lines expanded downwards, indicating potential for the contract to decline. It is likely to lose support from the 20-day moving average tonight.

Nickel: The SHFE 1811 contract fell again to end at 102,450 yuan/mt after it recovered its early losses. Its KDJ lines converged and expanded upwards while the MACD green line shortened. We expect it to hover around 102,400 yuan/mt tonight.

Lead: The SHFE 1810 contract extended its overnight losses to an intraday low of 18,570 yuan/mt before it rebounded to close at 18,705 yuan/mt. The contract lost all gains made in the previous day and this lowered confidence across longs.  Over 65 million yuan left the contract today. We expect the contract to test support at the 10-day moving average tonight.

Tin: The SHFE 1901 contract broke resistance at the 20-day moving average today and is likely to continue its upward performance in the short term, with resistance at 146,500 yuan/mt.