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SMM Evening Comments (Jun 27)
Jun 27,2018 18:26CST
price review forecast
SMM Evening Comments

SHANGHAI, Jun 27 (SMM) – Nonferrous metals futures mostly rebounded on Wednesday June 27 with SHFE lead leading the gains again with a rise of nearly 2%. Zinc gained 1.6%, aluminium rose 0.75%, and tin inched up. Nickel closed 0.56% lower, and copper went down slightly. 

The ferrous complex, except for hot-rolled coil, dipped across the board but at a slower pace. Coke fell nearly 1% and coking coal lost 0.64%. Iron ore and rebar edged down. 

Copper: The SHFE 1808 contract mostly traded below the daily moving average with pressure from the 60-day one. The contract was dragged to a low of 51,440 yuan/mt in the afternoon as investors added their shorts and cut longs. Profits of China’s industrial companies above a designated size went up 21.1% year on year in May, and the Chinese yuan depreciated further. These are expected to provide some support to copper price. However, pressure will remain at the 60-day moving average. Investors would take guidance tonight from the US durable goods orders in May. 

Aluminium: The SHFE 1808 contract hovered at 14,160 yuan/mt during the day after it surged to a high of 14,235 yuan/mt near opening. Open interests across all SHFE aluminium contracts dipped 16,772 lots to 646,664 lots. While it’s likely to trade weakly in the short run, downward room will be limited with costs support.   

Zinc: The SHFE 1808 contract returned to the Bollinger lower bands today as sentiment improved. It was pushed up to a high of 22,990 yuan/mt as investors covered their shorts, after consolidating at the daily moving average of 22,750 yuan/mt in the morning. However, it will face pressure to stand above 23,000 yuan/mt tonight, given a weak LME zinc during the European trading session. 

Nickel: The trading range of the 1809 contract moved below the daily moving average at 114,740 yuan/mt today. Despite intensified trade tensions, nickel prices are set to be supported by shrinking domestic inventory, limited nickel pig iron (NPI) production and growing stainless steel output on recovered profits. We expect the contract to hover at highs tonight. Investors would look for more cues tonight from the US crude oil inventory data over the week ended June 22 from the Energy Information Administration (EIA).

Lead: The SHFE 1808 contract registered a second day of increase with open interests rising 2,948 lots to 64,286 lots. It hovered at around 20,155 yuan/mt after climbing up to a high of 20,195 yuan/mt with buoyance from longs. It is likely to gain further tonight. However, pressure is seen in the short term from increasing secondary lead supply as environmental probe ends.  

Tin: The SHFE 1809 contract traded rangebound at 145,100-145,600 yuan/mt today but dipped sharply to a low of 144,870 yuan/mt near closing. A plunging LME tin is likely to weigh on the contract tonight. Support is seen at 143,000 yuan/mt tonight. 


Evening comments
Futures movement

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