SMM Evening Comments (Jul 13)-Shanghai Metals Market

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SMM Evening Comments (Jul 13)

Price Review & Forecast 06:08:07PM Jul 13, 2018 Source:SMM

SHANGHAI, Jul 13 (SMM) – SHFE nonferrous metals saw mixed trading on Friday July 13 amid some relief without major developments in the US-China trade issue.

Tin climbed 1.2% with copper and nickel nudging up 0.47% and 0.46% respectively. Zinc slipped 0.68%, aluminium dipped 0.43% and lead fell 0.94%.

The ferrous complex also closed mixed. Hot-rolled and rebar inched up while coking coal slumped 2.2%. Coke dropped 1.6% and iron ore dipped.

Copper: The SHFE 1809 contract hovered around its daily moving average and stablised around 48,800 yuan/mt during the day as market jitters eased. Technically, its KDJ green line is likely to shorten though it is relatively tall now. We expect it to continue to hover around its daily moving average tonight. Market participants can take some cues from the US export prices in June and consumer confidence data in July.

Aluminium: As shorts added their positions and longs covered their positions, the SHFE 1809 contract declined in the afternoon to a low of 14,030 yuan/mt. We expect it to remain weak and rangebound in the short term as alumina prices rebound while consumption weakens in the low season. It is likely to continue to trade at 13,900-14,200 yuan/mt next week.

Zinc: As shorts added their positions, the SHFE 1809 contract fell until it found support at the lower Bollinger band. Shrinking social inventories across Shanghai, Tianjin and Guangdong will provide some support. We expect the contract to test support at the 20,500 yuan/mt level tonight.

Nickel: The SHFE 1809 contract dipped in the afternoon as cautious sentiment caused longs to exit. This followed after the contract hovered around the daily moving average and touched a high of 113,780 yuan/mt in the morning. It closed at 112,440 yuan/mt, up 510 yuan/mt from Thursday, less than the previous day’s surge of 3,970 yuan/mt. Some 250 million yuan of funds flowed out of the SHFE nickel index today, topping the nonferrous complex. As the KDJ indicators expanded upwards and the MACD green line shortened, the contract is expected to trade robustly around 113,000 yuan/mt tonight. Investors would take more cues from the US consumer confidence in July surveyed by the University of Michigan.

Lead: As some shorts covered their positions, the SHFE 1808 contract climbed up to the 18,940 yuan/mt level after it hovered below its daily moving average. The contract kept some distance with its all moving averages overhead. Open interest continued to shrink over the past week and its trading volumes also fell for three consecutive days. We expect it to remain weak and rangebound tonight.

Tin: The SHFE 1809 contract initially climbed to a high of 145,750 yuan/mt before it lost some gains during the day. We see limited support from fundamentals in the current low season.

Key Words:  Evening comments   Copper   Aluminium   Zinc   Nickel   Tin   Lead 

SMM Evening Comments (Jul 13)

Price Review & Forecast 06:08:07PM Jul 13, 2018 Source:SMM

SHANGHAI, Jul 13 (SMM) – SHFE nonferrous metals saw mixed trading on Friday July 13 amid some relief without major developments in the US-China trade issue.

Tin climbed 1.2% with copper and nickel nudging up 0.47% and 0.46% respectively. Zinc slipped 0.68%, aluminium dipped 0.43% and lead fell 0.94%.

The ferrous complex also closed mixed. Hot-rolled and rebar inched up while coking coal slumped 2.2%. Coke dropped 1.6% and iron ore dipped.

Copper: The SHFE 1809 contract hovered around its daily moving average and stablised around 48,800 yuan/mt during the day as market jitters eased. Technically, its KDJ green line is likely to shorten though it is relatively tall now. We expect it to continue to hover around its daily moving average tonight. Market participants can take some cues from the US export prices in June and consumer confidence data in July.

Aluminium: As shorts added their positions and longs covered their positions, the SHFE 1809 contract declined in the afternoon to a low of 14,030 yuan/mt. We expect it to remain weak and rangebound in the short term as alumina prices rebound while consumption weakens in the low season. It is likely to continue to trade at 13,900-14,200 yuan/mt next week.

Zinc: As shorts added their positions, the SHFE 1809 contract fell until it found support at the lower Bollinger band. Shrinking social inventories across Shanghai, Tianjin and Guangdong will provide some support. We expect the contract to test support at the 20,500 yuan/mt level tonight.

Nickel: The SHFE 1809 contract dipped in the afternoon as cautious sentiment caused longs to exit. This followed after the contract hovered around the daily moving average and touched a high of 113,780 yuan/mt in the morning. It closed at 112,440 yuan/mt, up 510 yuan/mt from Thursday, less than the previous day’s surge of 3,970 yuan/mt. Some 250 million yuan of funds flowed out of the SHFE nickel index today, topping the nonferrous complex. As the KDJ indicators expanded upwards and the MACD green line shortened, the contract is expected to trade robustly around 113,000 yuan/mt tonight. Investors would take more cues from the US consumer confidence in July surveyed by the University of Michigan.

Lead: As some shorts covered their positions, the SHFE 1808 contract climbed up to the 18,940 yuan/mt level after it hovered below its daily moving average. The contract kept some distance with its all moving averages overhead. Open interest continued to shrink over the past week and its trading volumes also fell for three consecutive days. We expect it to remain weak and rangebound tonight.

Tin: The SHFE 1809 contract initially climbed to a high of 145,750 yuan/mt before it lost some gains during the day. We see limited support from fundamentals in the current low season.

Key Words:  Evening comments   Copper   Aluminium   Zinc   Nickel   Tin   Lead