SMM Evening Comments (May 10)

Published: May 10, 2018 18:16

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SMM Evening Comments

SHANGHAI, May 10 (SMM) – Nonferrous metals futures inched up for the most part on Thursday May 10. Tin gained nearly 0.5%, while copper, zinc, and lead went up slightly. Aluminium edged down, and nickel fell close to 0.4%.

The ferrous complex rose across the board except for iron ore, which lost over 0.4%. Hot-rolled coil gained nearly 1%, while rebar, coking coal, and coke edged up.

Copper: The SHFE 1807 contract received support from longs and hit a high at 51,310 yuan/mt before it fell to 50,970 yuan/mt as LME copper weakened. The contract closed higher and stood between the five- and 40-day moving averages. It is likely to consolidate at its current level tonight.

Aluminium: The SHFE 1807 contract met support at the 10-day moving average after dipping to a low of 14,600 yuan/mt with pressure from shorts. Without significant conflict in the market, we expect the contract to trade rangebound in the short term.

Zinc: The SHFE 1807 contract climbed up twice to a high of 23,875 yuan/mt, but lost some gains at closing with pressure from shorts. It mostly hovered between the 10- and 20-day moving averages. There was a supply glut in the spot market as imports grew and demand declined. The contract will continue to trade rangebound tonight.

Nickel: With pressure from shorts, the SHFE 1807 contract fell below the 20-day moving average. Nickel prices were depressed by China’s weaker-than-expected inflation data falling short of expectations depressed the nickel prices. The contract is likely to hover at current levels tonight. Investors will take cues from the US CPI in April and its jobless claims over the week ended May 5.

Tin: Driven by brisk trading, the SHFE 1809 contract surged to a high of 146,490 yuan/mt, and we expect the contract to have limited downward room in the near term. In the physical market, smelters were unwilling to let go cargos at lower prices due to a tight supply of tin ore.

Lead: The SHFE 1806 contract dipped before it climbed up to close at 18,935 yuan/mt on Thursday. Despite hovering at high levels in recent days, the contract continued to face pressure and is likely to reverse the movement in the following few days.

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