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SMM Evening Comments (Jun 6)
Jun 6,2018 17:50CST
price review forecast
SMM Evening Comments

SHANGHAI, Jun 6 (SMM) – Nonferrous metals rose across the board on Wednesday June 6 with SHFE nickel leading the gains with a rise of nearly 2%. Copper jumped 1.96%, zinc grew almost 1.9%, aluminium and lead rose over 1%, and tin inched up. 

The ferrous complex also soared as rebar led the gains and closed nearly 2% higher. Iron ore went over 1.8% higher, and hot-rolled coil rose over 1%. Coking coal gained nearly 1% and coke went up slightly. 

Copper: The SHFE 1808 contract closed at 53,320 yuan/mt on Wednesday, registering a fifth consecutive trading day of increase. It climbed to a high of 53,390 yuan/mt, bolstered by its LME counterparts in the afternoon as labour negotiations in Chile raised concerns among traders. The contract, currently at a high in three months, is expected to consolidate at its current levels tonight and to test support at 53,000 yuan/mt.

Aluminium: As base metals rose across the board, the SHFE 1807 contract climbed and closed at 14,885 yuan/mt. Open interest lost 9,608 lots to 216,002 lots. The dominant contract moved to the 1808 today, as open interest gained 16,356 lots to 216,854 lots. The dominant contract is expected to test pressure at the upper Bollinger bands in the short term. 

Zinc: The SHFE 1807 contract stood firm above the Bollinger upper bands with 20- and 40-day moving averages below barely diverging from each other. It gained 350 yuan/mt to close at 24,635 yuan/mt, with open interests down 9,334 lots to 170,000 lots. We see it strengthening in the short term with support at the upper Bollinger bands tonight. The dominant contract is likely to move to the 1808 contract tonight.

Nickel: With support from the five-day moving average, the SHFE 1807 contract soared 2,310 yuan/mt from closing onTuesday. Given the impact of domestic environmental restrictions, the contract is expected to hover at high levels tonight with the KDJ indicators expanded upwards and the longer-term moving average of the MACD lengthened. Investors will take more cues from the US weekly oil inventory data from the Energy Information Administration (EIA).

Lead: The SHFE 1807 contract mostly hovered at high levels and closed at 20,675 yuan/mt, up 290 yuan/mt from Tuesday, with open interests decreasing 4,556 lots to 92,412 lots. The contract diverged from all the moving averages below during the day. We see it continuing to consolidate at highs tonight. 

Tin: The SHFE 1809 contract traded around the five- and 10-day moving averages during the day with the highest level at 153,800 yuan/mt. It is expected to remain rangebound in the short term.

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Evening comments
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