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SMM Evening Comments (May 16)

Price Review & Forecast 06:02PM May 16, 2018 Source:SMM

SHANGHAI, May 16 (SMM) – Both nonferrous and ferrous metals closed mixed on Wednesday May 16. SHFE nickel, aluminium, zinc edged up. SHFE copper closed 0.5% lower and tin dipped. SHFE lead closed flat.

Coke rose close to 1% while hot-rolled coil gained 0.7%. Rebar closed flat. Iron ore dropped close to 1% and coking coal dipped.

Copper: The SHFE 1807 contract regained almost all losses at the lower opening price during the day. It now stands below all the moving averages with little support and much pressure from the five- and 10-day moving averages. We expect it to trade weakly and rangebound tonight.

Aluminium: As longs entered the market, the SHFE 1807 contract hit a high of 14,825 yuan/mt during the day. It moved rangebound and closed at 14,790 yuan/mt. We expect aluminium prices to trade rangebound in the short term and to strengthen in the medium term.

Zinc: As longs added their positions, the SHFE 1807 contract rose during the day. The SHFE zinc index saw a decline of 22,324 lots in open interest, which suggested that investors were keen to close out their positions and monitor from the sidelines. The contract failed to break the 24,000 yuan/mt level during the day with strong resistance at the five-, 10- and 20-day moving averages. We expect it to consolidate tonight.

Nickel: In the morning, the trading level of SHFE 1807 contract moved strongly rangebound above the daily moving average. In the afternoon, the contract came off from a high of 108,740 yuan/mt as longs took their profits and left. Its trading level then consolidated around the 107,700 yuan/mt level with support from several moving averages. We expect it to continue to consolidate tonight.

Lead: The 1806 contract surged to a high of 19,490 yuan/mt after it consolidated around the daily moving average earlier in the morning. It met pressure at the 19,500 yuan/mt level and came off as longs exited the market. SHFE lead consolidated at high levels for two days with lower open interest and rebounded from lows several times as shorts left the market. We expect it to test support at the five-day moving average tonight.

Tin: The SHFE 1809 contract continued its weak performance today and closed below several moving averages. Given the domestic supply glut, we expect SHFE tin to remain under pressure in the short term with support at the 145,000 yuan/mt and 143,000 yuan/mt levels.

 


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Key Words:  copper   aluminium   nickel   zinc   lead   tin