SMM Evening Comments (Nov 13)

SHANGHAI, Nov 13 (SMM) – SHFE base metals ended the trading day in mixed performance and tin continued to be the best performer, up over 1% on the day. Nickel gained 0.26%, copper increased by 0.2% and zinc climbed 0.14% while lead dipped 0.16% and aluminium lost 0.32%.

The ferrous complex ended in negative territory across the board with iron ore being the biggest loser, down 1.73% on the day. Coking coal dropped 1.37%, coke slid 0.37%, hot-rolled coil edged down 0.08% and rebar dipped 0.03%.

Copper: Tracking gains in its LME counterpart, the SHFE 1901 contract rebounded from earlier lows of 48,670 yuan/mt to close in positive territory at 49,100 yuan/mt. This helped the contract stem a six-day losing streak. Open interest for the contract shrank 890 lots to 197,062 lots. Market participants should monitor if the SHFE 1901 contract holds on to the 49,000 yuan/mt level tonight.

Aluminium: As shorts took profits after the SHFE 1901 contract continued its overnight weak performance to the day's low of 13,690 yuan/mt, the contract rebounded but failed to regain all earlier losses. We expect the contract to remain weak and trade rangebound to seek support tonight.  

Zinc: With support at the 60-day moving average, the SHFE 1901 contract recovered earlier losses to end in the black at 21,010 yuan/mt today. Market participants should monitor if the contract holds on to the 21,000 yuan level tonight, with gains in its LME counterpart.

Nickel: Dips in the US dollar encouraged longs to build and shorts to cut their bets. This helped the SHFE 1901 contract to extend its rebound to 95,380 yuan/mt before the contract inched down to close at 95,180 yuan/mt. Its KDJ lines converged with a shortened MACD green line. The contract is likely to hover around 95,000 yuan/mt tonight.

Lead: The SHFE 1812 contract initially plunged to the day’s lows of 18,445 yuan/mt before it rebounded to the daily moving average. As some longs covered their positions to avoid risk, the contract edged down by closing, ending at 18,475 yuan/mt. The 1901 contract is expected to become the most traded SHFE lead contract tonight. SHFE lead temporarily halted its increases and is likely to trade rangebound tonight.

Tin: As longs took profits after the SHFE 1901 contract extended overnight gains to the day’s highs of 152,700 yuan/mt, the contract fell to close below overnight’s open price at 151,520 yuan/mt. SHFE tin remained rangebound at highs and is expected to test resistance at 152,000 yuan/mt in the short term.