SMM Evening Comments (Jan 14)

SHANGHAI, Jan 14 (SMM) – SHFE nonferrous metals traded mixed on Monday. Nickel climbed 0.7%, tin advanced 0.6%, lead gained close to 0.1% and zinc nudged up 0.02% while copper slipped 0.6% and aluminium fell 0.7%.

The ferrous complex traded higher across the board. Coke surged 3.2%, coking coal jumped 2.8%, rebar popped 1.6%, hot-rolled coil rose 1.1% and iron ore gained close to 1%.

Copper: As shorts added their bets following the decline in LME copper, the SHFE 1903 contract fell to the day-low of 46,730 yuan/mt in afternoon trades, near the lower Bollinger band. The contract ended the trading day 0.6% lower at 46,890 yuan/mt, with a three-day losing streak. It is likely to try to hold onto 46,700 yuan/mt tonight.

Aluminium: Despite initial gains, the SHFE 1903 contract weakened during the day as shorts added their positions. It ended the trading day 0.7% lower at 13,285 yuan/mt. Declining costs and weakening demand accounted for losses in prices. The SHFE 1903 contract is likely to trade rangebound tonight and is unlikely to rebound significantly in the short term.

Zinc: The SHFE 1903 contract lost most of overnight gains to end the trading day 0.02% higher at 20,285 yuan/mt as China’s disappointing trade data prompted shorts to load up bets. While inventories of refined zinc in China stayed at lows, quiet downstream consumption ahead of Chinese New Year and an open import arbitrage window are likely to accelerate gains in inventories. This would weigh on zinc prices. The SHFE 1903 contract is likely to see a slight correction tonight with support at 20,000 yuan/mt.

Nickel: As longs added their positions, the SHFE 1905 contract hit a month-high of 92,490 yuan/mt shortly after morning trades began. It then lost those gains as a lack of confidence prompted longs to take profits. The contract finished the trading day 0.7% higher at 91,700 yuan/mt. It is expected to try to stand firmly above the five-day moving average tonight.

Lead: The SHFE 1902 contract rebounded from earlier lows to end the trading day 0.09% higher at 17,470 yuan/mt. It has seen such similar performance for a second straight trading day, suggesting robust support at lows. As shorts continued to dominate the market, the contract is unlikely to regain previous losses in the near term and is likely to hover around 17,500 yuan/mt tonight.

Tin: The SHFE 1905 contract came off to end the trading day 0.6% higher at 147,670 yuan/mt after hitting the day’s high of 148,460 yuan/mt, above the 60-day moving average. The contract is likely to try to break the 60-day moving average and 148,000 yuan/mt in the near term.