SMM Evening Comments (Jun 13)

SHANGHAI, Jun 13 (SMM) – SHFE nonferrous metals fell for the most part on Thursday June 13 as copper lost 0.92%, lead dipped 0.46%, zinc declined 0.47%, aluminium eased 0.14%, while nickel expanded 2.13%, and tin rose 0.19%. 

The ferrous complex also ended mostly lower. Coking coal slid more than 1%, coke decreased 0.46%, rebar lost 0.34%, hot-rolled coil went down 0.22%, while iron ore continued to expand 1.56%. 

Copper: A lack of technical support and a buildup of shorts prevented the most-traded SHFE August contract from exceeding 46,480 yuan/mt. It dipped to an intraday low of 46,210 yuan/mt after it tested resistance from the 46,360 yuan/mt level in the afternoon, ending 0.92% lower on the day at 46,270 yuan/mt. As the KDJ indicators expanded downwards and the MACD red line shortened, the contract is expected to test support from 46,000 yuan/mt tonight. 

Aluminium: The SHFE August contract rebounded after it fell below the daily moving average, but pressure from the 60-day moving average stemmed its increase at 13,965 yuan/mt, and lowered it to an intraday low of 13,925 yuan/mt. It lost 0.14% on the day and finished at 13,955 yuan/mt, below the 10-day moving average. As the MACD green line shortened and the KDJ indicators showed signs of rising, the contract is expected to remain above 13,900 yuan/mt tonight. 

Zinc: The most-traded SHFE August contract tested pressure from the 20,400 yuan/mt level twice in early trades, but expanding shorts dragged it to an intraday low of 20,160 yuan/mt before noon. It recovered part of the losses and ended 0.47% lower on the day at 20,285 yuan/mt. The backwardation structure continued to intensify with the spread between the June and August contracts above 1,000 yuan/mt. Tonight, we see the August contract hovering around the 20-day moving average. 

Nickel: A surge of longs pulled the SHFE July contract above the 100,000 yuan/mt level, to an intraday high of 100,120 yuan/mt, right before it closed at 99,950 yuan/mt, up 2.13% on the day. This was probably driven by supply concerns caused by Indonesia floods. Open interests accumulated 8,500 lots to 166,000 lots. An influx of 377 million yuan of capital was seen across all SHFE nickel contracts, topping base metals. As the MACD indicators turned red, we expect it to test support from 100,000 yuan/mt tonight. 

Lead: Growing discounts of secondary refined lead sparked concerns of longs, which covered their positions and lowered the most-traded SHFE July contract to an intraday low of 16,025 yuan/mt. It rebounded a little and closed at 16,065 yuan/mt, down 0.46% on the day, with open interests down 2,224 lots to 43,966 lots. Support from the 16,000 yuan/mt level remained. Tonight, it is expected to consolidate around 16,000 yuan/mt. 

Tin: The most-liquid SHFE September contract extended its upside trend from overnight, as it rebounded from 144,820 yuan/mt, to an intraday high of 145,750 yuan/mt. It retreated and ended at 145,530 yuan/mt, up 0.19% on the day. With support from the five- and 20-day moving averages, the contract is expected to face pressure from 146,000 yuan/mt tonight.