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SMM Evening Comments (Jun 14)
Jun 14,2018 17:48CST
price review forecast
SMM Evening Comments

SHANGHAI, Jun 14 (SMM) – Nonferrous metals futures, except for nickel, fell on Thursday June 14. SHFE tin slumped over 1.5%, lead dipped 1%, aluminium closed 0.78% lower, and zinc, copper inched down. Nickel rose 0.44%. 

Meanwhile, the ferrous metals rose, except for coking coal. Coke closed nearly 2.4% higher, and rebar gained nearly 0.9%. Iron ore rose 0.85%, and hot-rolled coil edged up. 

Copper: The SHFE 1808 contract diverged from the daily moving average to a low of 53,520 yuan/mt as investors cut their long positions. As shorts also exited near closing, the contract rebounded a little to close at 53,630 yuan/mt, down 80 yuan/mt from Wednesday. It is expected to hover around 53,500 yuan/mt tonight. Value added of China's industrial companies above a designated size went up 6.8% year on year in May, lower than expectations. The US continuous jobless claims for the week ended June 2 would give some cues to the market tonight.

Aluminium: The SHFE 1808 contract dipped to a low of 14,610 yuan/mt with pressure from shorts. The decline was within expectations, however, and we expect it to drop further in the short run on weak fundamentals and declining alumina prices.  

Zinc: The SHFE 1808 contract met pressure around 24,400 yuan/mt but with strong support at 24,000 yuan/mt. After dropping to a low of 24,245 yuan/mt, it closed at 24,300 yuan/mt with open interest increasing 1,104 lots to 204,000 lots. Although it lacks upward momentum, we do not expect the contract to drop sharply in the short term given its robust LME counterpart. It is likely to trade rangebound at the five-day moving average tonight with guidance from LME zinc. 

Nickel: The SHFE 1809 contract traded between several moving averages today at around 115,300 yuan/mt with support at the 40-day one. As the KDJ indicators expanded downwards and the MACD green line lengthened, the contract is expected to trade weakly tonight. Investors would look for more cues tonight from the European Central Bank meeting, US retail sales growth in May, and its weekly initial jobless claims. 

Lead: The SHFE 1807 contract fell below the five- and 10-day moving averages to a low of 20,220 yuan/mt in the morning given the US interest rate hike. It closed at 20,250 yuan/mt with open interest decreasing 5,128 lots to 68,720 lots. Open interest declined nearly 30,000 lots in the past seven trading days. The contract is likely to test support at the 20-day moving average tonight. 

Tin: The SHFE 1809 contract hovered at 147,300-148,300 yuan/mt during the day with open interest reducing 1,572 lots to 36,632 lots. It is likely to consolidate at lows with support at 146,000 yuan/mt in the short term.



Evening comments
Futures movement

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