SMM Evening Comments (May 8)

SHANGHAI, May 8 (SMM) – Nonferrous metals futures rose for the most part on Tuesday May 8 but at slower rates from the previous day. SHFE zinc led the gains with an increase of 1.34%, lead grew over 1% and aluminium and copper inched up. Nickel fell from highs to close nearly 1% higher. Tin dipped nearly 0.9% from Monday.

The ferrous complex saw mixed trading as iron ore led the gains and closed 1.6% higher. Coking coal grew almost 1.6%, and coke gained 1%. Rebar and hot-rolled coil edged down.

Copper: The SHFE 1807 contract rebounded to a high of 51,490 yuan/mt today with its trading level expanded upwards from the previous day. Today, it kept between moving averages with support from below. The contract is expected to test support at 51,350 yuan/mt tonight, with pressure from the stronger US dollar. 

Aluminium: Rising alumina prices and tight aluminium inventories in the spot market provided support today. The SHFE 1807 contract traded rangebound with momentum and hit a high of 14,790 yuan/mt before noon. We expect the contract to hover at highs tonight. Russian aluminium is likely to continue to face pressure from the US.

Nickel: The SHFE 1807 contract stood above the five-day moving average and climbed up to a high of 105,830 yuan/mt with support from longs. The contract saw a capital inflow of 177 million yuan during the day with the KDJ indicator expanded upwards. It is likely to hover at highs tonight.

Zinc: SHFE 1807 contract rebounded after it fell during the day with pressure at the 20-day moving average. As LME zinc weakened during European trading, the contract is likely to face greater pressure to stand above 24,000 yuan/mt tonight. It is likely to hover between the five- and 10-day moving averages tonight.

Lead: The SHFE 1806 contract mostly hovered above the daily moving average today and reversed all losses near closing as longs added their positions. We see it facing resistance at 1,900 yuan/mt in the short term and trading rangebound tonight.

Tin: With pressure from shorts, the SHFE 1809 contract dipped to a low of 146,000 yuan/mt in the afternoon. The contract is likely to dip further in the short term with support at 145,000 yuan/mt. 

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