SMM Evening Comments (Jan 26)

SHANGHAI, Jan 26 (SMM)－Nonferrous futures retreated today for the most part, except for a 2% rise in nickel prices. SHFE lead and aluminium dropped about 1%. Tin, copper and zinc all edged down slightly.

The ferrous complex was mixed with coke registering a small rise. Hot-rolled coil finished flat while iron ore dropped 1.5% and coking coal slipped 0.5%. Rebar also closed lower.

Copper: SHFE copper is expected to stay rangebound with light downstream consumption and tighter cash ahead of Chinese New Year. We see support at around 53,000 yuan/mt and pressure at 54,000 yuan/mt.

Aluminium: While transportation has been affected by rain and snow, high inventory levels continue to give pressure to the physical market. However, a lower SHFE/LME price ratio may still lend some support to SHFE aluminium prices.

Zinc: SHFE zinc sees support at the five-day, 10-day and 20-day moving averages but we also expect a limited upward room without a clear direction.

Tin: SHFE tin is expected to stay rangebound at above 146,000 yuan/mt.

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