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SMM Evening Comments (May 29)
May 29,2018 18:18CST
price review forecast
SMM Evening Comments

SHANGHAI, May 29 (SMM) – Nonferrous metals futures rose across the board on Tuesday May 29, except for SHFE aluminium. SHFE tin soared 3.7% and hit the highest level in one and an half years at 155,140 yuan/mt. SHFE nickel jumped 2.8% and finished the day at a three-year high at 112,880 yuan/mt. SHFE lead and zinc rose over 1% and copper edged up.

The ferrous complex also rose across the board. Coke surged 3.9%, coking coal jumped 2.7%, iron ore rose over 2%, hot-rolled coil gained 1.6%, and rebar went up over 1%.

Copper: LME copper rebounded today and bolstered its SHFE counterpart to pare the lossesfrom the previous day. Technically, the SHFE 1807 contract now struggles among several moving averages with firm support at the 40-day moving average. We expect it to trade rangebound and stabilise tonight.

Aluminium: As shorts took profits and closed out their positions, the SHFE 1807 contract rebounded to a high of 14,815 yuan/mt from a low of 14,715 yuan/mt in the morning. The contract traded rangebound between the five- and 10-day moving averages in the afternoon while investors continued to exit the market. Open interest for SHFE aluminium continued to register new lows and shrank 2,998 lots to 637,180 lots. We expect SHFE aluminium to remain rangebound in the short term with a lack of new development for direction.

Zinc: The SHFE 1807 contract broke resistance at the 24,000 yuan/mt level and the 40-day moving average in the morning. The contract hit a high of 24,180 yuan/mt in the afternoon as some longs added their positions. As LME zinc broke resistance at the $3,100/mt level during the European trading hours, we expect SHFE zinc to test pressure at the 60-day moving average tonight.

Nickel: The SHFE 1807 contract surged to a three-year high of 112,930 yuan/mt near closing as prices of stainless steel rose on high downstream demand. This followed Jiangsu province’s efforts to eliminate induction furnaces. The contract is expected to hover at highs tonight as the KDJ indicators expanded upwards and the longer-term moving average of the MACD lengthened. Investors will take more cues from the eurozone M3 money supply in April and the US Conference Board consumer confidence index in May.

Lead: Longs pushed the SHFE 1807 contract up to a high of 20,210 yuan/mt today but the contract lost some gains as investors cashed in at high levels. The contract continued to move along the five-day moving average during the day with its upward trend unchanged. Shorts were keen to reduce their positions at above the 20,000 yuan/mt level in the recent couple of days. We expect the contract to consolidate at high levels tonight.

Tin: The SHFE 1809 contract extended its gains and broke resistance at the 152,000 yuan/mt level today as long positions continued to be added. It then consolidated at high levels and hit a high of 155,140 yuan/mt. We expect it to test the next resistance at 156,000 yuan/mt in the short term.


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Evening comments
Futures movement

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