SMM Evening Comments (Jun 26)

SHANGHAI, Jun 26 (SMM) – Most SHFE nonferrous metals closed higher on Wednesday as investors looked ahead to the meeting between US President Donald Trump and his Chinese counterpart Xi Jinping at the G20 summit in the coming weekend.

Zinc saw the biggest gain of 1.5%, nickel rose 1%, copper advanced 0.6%, aluminium gained close to 0.3% while lead lost 0.2% and tin fell 0.3%.

Prices were also pressured by a stronger dollar after comments from the US Federal Reserve chairman curbed rate cut enthusiasm.

The ferrous complex, except for iron ore, traded higher. Coke climbed 1.5%, rebar rose 0.9%, hot-rolled coil advanced 0.3% and coking coal gained 0.2%.

Copper: The most traded SHFE August contract weakened during the day, relinquishing some overnight gains to close the trading day 0.64% higher at 47,210 yuan/mt. US-China trade optimism and bullish technical indicators will offer some support to SHFE copper, which is expected to test the 47,500 yuan/mt level tonight.

Aluminium: The most active SHFE August contract hovered in a wide range during the day, closing the trading day 0.25% higher at 13,910 yuan/mt. Shorts held back from aggressively building up positions ahead of the Trump-Xi meeting, which deterred SHFE aluminium from sharply falling. The contract is expected to continue to veer around the 14,000 yuan/mt level tonight.

Zinc: The most traded SHFE August contract traded rangebound during the day, holding onto overnight gains to close the trading day 1.52% higher at 20,085 yuan/mt, above the 20-day moving average. Investors moved their positions to forward contracts, resulting in an increase of over 14,600 lots in open interest for the September and October contracts and a decline of over 10,000 lots in the August contract. Optimism surrounding US-China trade talks will buoy SHFE zinc, while tepid consumption will keep gains in check. The contract is expected to continue to hover around the middle Bollinger band tonight.

Nickel: The most active SHFE August contract closed the trading day 1.03% higher at 100,070 yuan/mt after seeing a month-high of 101,000 yuan/mt, near the upper Bollinger band, overnight. Strength at the 100,000 yuan/mt level is under scrutiny tonight.

Lead: As longs exited their positions, the most traded SHFE August contract erased overnight gains to finish the trading day 0.22% lower at 16,185 yuan/mt. It lost the gains from the previous day, with no hope for a breakthrough of the 60-day moving average. The contract is expected to test support from the middle Bollinger band as low as 16,050 yuan/mt tonight.

Tin: The most liquid SHFE September contract slid during the day, losing 0.31% to close at an intraday low of 143,480 yuan/mt. Support is seen at 143,500 yuan/mt, with next support at 143,000 yuan/mt. Resistance is seen at the middle Bollinger band as high as 144,400 yuan/mt.