SMM Evening Comments (Oct 29)

SHANGHAI, Oct 29 (SMM) – SHFE nonferrous metals, except for zinc, closed lower on Tuesday. Lead, copper and aluminium shed 0.3%, nickel and tin fell 0.2%.

The ferrous complex traded mixed. Stainless steel rose 0.5%, rebar and hot-rolled coil gained 0.2%, while coke slipped 0.7% and iron ore dropped 1.7%. Coking coal stayed flat.

Copper: The most active SHFE 1912 contract weakened during the daytime session, shedding 0.29% to end the trading day at 47,430 yuan/mt, as investors trimmed their long positions on resurfacing concerns about demand after US crude prices fell below $55 a barrel and the recent release of dismal economic data from major economies. SHFE copper is expected to test 47,300 yuan/mt tonight, with technical indicators in a bearish bias.  

Aluminium: The most traded SHFE 1912 contract slipped to the lowest in about two weeks at 13,740 yuan/mt in the morning, before it clawed back some losses to close the trading day 0.29% lower at 13,785 yuan/mt. Signs of a slowing in consumption will be clearer when it comes to November, driving investors to short SHFE aluminium. The contract is expected to remain weak and rangebound tonight.  

Zinc: The most active SHFE 1912 contract edged lower during the daytime session, paring some gains from overnight trades when it hit a nearly six-week high of 19,225 yuan/mt, and finished the trading day 0.76% higher at 19,110 yuan/mt. Investors moved to later-dated contracts and exited from the December contract. The 1912 contract now faces resistance at the upper Bollinger band.  

Nickel: The most traded SHFE 1912 contract jumped above the 40-day moving average to a two-week high of 136,630 yuan/mt in the morning, before it gave back all those gains to close the trading day 0.17% weaker at 132,640 yuan/mt. Resistance at the 20-day moving average will come under scrutiny tonight.

Lead: Shorts knocked the most active SHFE 1912 contract to an intraday low of 16,630 yuan/mt during the daytime session, before the contract recouped some losses to end the trading day 0.33% lower at 16,670 yuan/mt. Moving averages kept SHFE lead in check. SHFE lead is expected to rise tonight, tracking gains in its LME counterpart, but with limited upside room.

Tin: As both longs and shorts cut positions, the most traded SHFE 2001 contract hovered in a wide range around 138,500 yuan/mt during the daytime session and ended down 0.16% at 138,540 yuan/mt. Support is seen at the 20-day moving average at 137,500 yuan/mt.