SMM Evening Comments (Jan 17): Key China data underpinned copper prices

SHANGHAI, Jan 17 (SMM) – SHFE nonferrous metals traded mixed on Friday, with nickel as the laggard, ending down 2.43%. 

China on Friday announced a slew of economic data for 2019, including gross domestic product, industrial production and fixed-asset investments. The release of GDP numbers showed the domestic economy grew by 6.1% in 2019, meeting expectations even amid a trade dispute with the US.

Aluminium advanced 1.23%, zinc gained 0.71%, tin increased 0.58%, while copper shed 0.04%, and lead went flat. 

The ferrous complex mostly closed higher as iron ore added 0.83%, rebar rose 1.04%, hot-rolled coil went up 1.14%, coke climbed 1.14%, while stainless steel eased 0.5%. 

Copper: Shanghai copper held firm at high levels even as it trimmed the increase from overnight as market sentiment was lifted by the upbeat economic data from China. The most-traded SHFE 2003 contract rebounded after hitting an intraday low of 49,130 yuan/mt, moving to the higher level today at 49,320 yuan/mt and finished at 49,250 yuan/mt, 0.04% lower on the day. Better-than-expected industrial output data from China and the central bank’s efforts to boost market liquidity also supported prices of the red metal. Optimistic signals from technical indicators may see the contract testing pressure from 49,400 yuan/mt tonight. 

Aluminium: The most-traded SHFE 2003 contract hovered at high levels above the Bollinger upper band, with support from loaded-up longs even as short positions also built up. Smaller-than-expected accumulation in social inventories of primary aluminium lifted morales of bullish positions. But holiday-thinned trades may keep investors cautious tonight, which may see the contract between 14,150-14,350 yuan/mt. 

Zinc: The most-traded SHFE 2003 contract hovered rangebound and pared some overnight increase, dipping to an intraday low of 18,270 yuan/mt and closed 0.71% higher on the day at 18,360 yuan/mt. Pressure from the Bollinger upper band will be monitored tonight. 

Nickel: The most-traded SHFE 2003 contract relinquished increase from last night and hovered steadily today, ending down 2.43% at 108,440 yuan/mt, giving up gains from the previous two sessions. Open interests shrank 7,481 lots to 141,080 lots. Support below is expected to remain strong tonight. 

Lead: The most-traded SHFE 2003 contract failed to extend increase from the previous day on the back of weakened upward momentum in LME lead. The SHFE contract ended flat on the day at 15,225 yuan/mt. It is expected to trade between the 60- and 40- day moving averages tonight. 

Tin: The most-traded SHFE 2006 contract rallied after loaded-up shorts weighed it to a session low of 139,850 yuan/mt. It returned to around the opening levels and finished 0.58% higher on the day at 140,690 yuan/mt. Pressure above is seen from 142,000 yuan/mt, with support expected at 139,300 yuan/mt.