SMM Evening Comments (May 3)

Published: May 3, 2018 18:20

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SMM Evening Comments

SHANGHAI, May 3 (SMM) – Nonferrous metals futures mostly inched up except for zinc on Thursday May 3. SHFE aluminium rose nearly 1%, while copper, lead, nickel, and tin went up slightly.

The ferrous complex also rose for the most part. Coke gained over 1.5%, coking coal and iron ore grew more than 1%. Hot-rolled coil fell nearly 1%, and rebar edged down.

Aluminium: As LME aluminium gained, the SHFE 1806 contract moved to a high of 14,570 yuan/mt in the afternoon. As investors were mostly hesitant and waited for guidance from fundamentals and sanctions on Russian aluminium, we see SHFE aluminium hovering at a narrow range in the short term

Copper: The main SHFE copper contract shifted from 1806 to 1807 this afternoon and mostly hovered below the daily moving average. LME copper surged after the SHFE afternoon session closed as market talk suggested China and US are likely to reach a new agreement on trade with restrictions being removed or relaxed. SHFE copper is expected to go up tonight with support from its LME counterpart.

Zinc: The SHFE 1807 contract faced resistance at 24,600 yuan/mt and dipped to a low of 23,460 yuan/mt today. Thin trading in the spot market also weighed on prices. However, the decline in the social inventory is likely to provide some support. We expect the contract to stay rangebound tonight.

Nickel: Less pressure from shorts drove the SHFE 1807 nickel contract up in the afternoon but it failed to break the resistance from the daily moving average. We expect the contract to stay firm tonight with support from several moving averages. More cues could be taken from the US weekly unemployment claims and its factory orders in March.

Tin: The SHFE 1809 contract attempted to climb up but met pressure at 147,200 yuan/mt during the day. It traded between the 10- and 40-day moving averages and we believe it will be hard to break the rangebound pattern in the short term.

Lead: Support from the five- and 10-day moving averages led the SHFE 1806 contract up today. It is expected to test support at 18,500 yuan/mt tonight. As LME lead registered losses for three consecutive days, investors would be cautious of it dragging down its SHFE counterpart in the near term.

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copper aluminium lead zinc tin nickel

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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