SMM Evening Comments (Dec 6)

SHANGHAI, Dec 6 (SMM) – SHFE nonferrous metals, except for aluminium, rose across the board on Friday. Nickel led the increases and recovered 1.93%. Copper advanced 0.34%, lead grew 0.27%, zinc climbed 0.25%, tin gained 0.37%, while aluminium lost 0.72%. 

The ferrous complex traded mixed as rebar added 0.23%, stainless steel rose 0.87%, while iron ore declined 0.24%, hot-rolled coil eased 0.19%, and coke shed 0.32%. 

Copper: The most-liquid SHFE 2001 contract rose for the second consecutive session as market sentiment was boosted after China's central bank on Friday pumped cash into the financial system via medium-term lending facility to maintain liquidity in the market. The contract recovered from an intraday low of 47,250 yuan/mt and ended up 0.34% on the day at 47,320 yuan/mt. Traders will await the decision from OPEC on its production policy tonight. Bullish signals from technical indicators may see the SHFE contract testing the 47,400 yuan/mt level. 

Aluminium: A lack of confidence in bullish position weighed the most-traded SHFE 2001 contract, which slipped to an intraday low of 13,835 yuan/mt and ended down for the second day by 0.72% at 13,840 yuan/mt. Short-covering offered limited support to prices. Trading range is expected between 13,800-13,900 yuan/mt next week. 

Zinc: The most-liquid SHFE 2001 contract registered the fourth consecutive session of increase, closing up 0.25% at 18,025 yuan/mt as a significant drop in social inventories of refined zinc lent upward momentum. With KDJ indicators expanding upwards and the MACD line turning positive, the contract will remain robust tonight. 

Nickel: The most-liquid SHFE 2002 contract found support from 104,000 yuan/mt and halted its consecutive sessions of decline, ending 1.93% higher on the day at 106,240 yuan/mt. Short position booked profits and left, cutting open interest by 28,000 lots to 383,000 lots. Pressure from the five-day moving average will be monitored tonight. 

Lead: The most-traded SHFE 2001 contract hovered with support from the daily moving average and finished 0.27% higher on the day at 15,120 yuan/mt. It kept stabilised for the second trading day but technical indicators remain bearish and may add its downside risk in the short term. 

Tin: The most-traded SHFE 2001 contract remained rangebound on Friday, as it rebounded after hitting a low of 138,800 yuan/mt, and finished the trading day 0.37% higher at 139,210 yuan/mt. Support is seen from 138,000 yuan/mt with resistance from 139,500 yuan/mt tonight.