SMM Evening Comments (Jul 16)

Price Review & Forecast 06:24:10PM Jul 16, 2018 Source:SMM

SHANGHAI, Jul 16 (SMM) – SHFE nonferrous metals traded under pressure and closed mixed on Monday July 16 as China's economic growth eased in the second quarter. Nickel slumped 2.6%, zinc plunged 2.1%, aluminium and copper edged down while tin and lead nudged up.

The ferrous complex also posted a mixed performance. Coke tumbled 2.7%, rebar and coking coal dipped while iron ore inched up and hot-rolled coil went up 0.72%.

Copper: The SHFE 1809 contract fell it rose to a high of 49,300 yuan/mt during the day. The slowdown in the Chinese economy did not improve market sentiment, and we expect the contract to test pressure at the 49,000 yuan/mt level tonight. The SHFE 1807 contract completed delivery today with a closing price at 48,410 yuan/mt and settlement price of 48,680 yuan/mt. A total of 70,850 mt was delivered.

Aluminium: As shorts and longs diverged, the SHFE 1809 contract traded rangebound around the 14,000 yuan/mt level during the day after it touched a low of 13,970 yuan/mt. Open interest of all SHFE aluminium contracts increased 7,566 lots to 657,862 lots. We expect 1809 to remain weak in the short term as alumina prices rebound but consumption weakens.

Nickel: The SHFE 1809 contract traded below its daily moving average and fell during the day as investors were cautious in going long. Its KDJ lines converged and the MACD green line lengthened. We expect the contract to hover just above 110,000 yuan/mt tonight. Market participants would take cues from the US retail sales in June.

Zinc: The SHFE 1809 contract tumbled during the day with massive sell-offs by shorts. It is likely to test support at the 20,000 yuan/mt level tonight. The SHFE 1807 contract completed delivery today with a settlement price of 21,020 yuan/mt and delivery volume of 3,450 mt.

Lead: A slump in SHFE zinc in the afternoon dragged the SHFE 1808 contract to a low of 18,990 yuan/mt with existing longs. While the contract gained 115 yuan/mt from last Friday to close at 19,005 yuan/mt, market participants are expected to retain a bearish outlook in the short run, as open interests declined 2,678 lots to 50,182 lots during the day. The contract is seen testing support at 19,000 yuan/mt tonight.The SHFE 1807 contract was delivered today, with a settlement price of 19,665 yuan/mt and delivery volume of 13,025 mt.

Tin: The SHFE 1809 contract mostly hovered in a narrow range around 145,200 yuan/mt, and dipped in the afternoon to close at 144,950 yuan/mt, up 190 yuan/mt from last Friday. Open interests fell 550 lots to 29,080 lots. Pressure was seen from slower-than-expected growth of China’s gross domestic product (GDP) in the second quarter. We expect the contract to consolidate at 145,000 yuan/mt level in the short term.

 

SMM Evening Comments (Jul 16)

Price Review & Forecast 06:24:10PM Jul 16, 2018 Source:SMM

SHANGHAI, Jul 16 (SMM) – SHFE nonferrous metals traded under pressure and closed mixed on Monday July 16 as China's economic growth eased in the second quarter. Nickel slumped 2.6%, zinc plunged 2.1%, aluminium and copper edged down while tin and lead nudged up.

The ferrous complex also posted a mixed performance. Coke tumbled 2.7%, rebar and coking coal dipped while iron ore inched up and hot-rolled coil went up 0.72%.

Copper: The SHFE 1809 contract fell it rose to a high of 49,300 yuan/mt during the day. The slowdown in the Chinese economy did not improve market sentiment, and we expect the contract to test pressure at the 49,000 yuan/mt level tonight. The SHFE 1807 contract completed delivery today with a closing price at 48,410 yuan/mt and settlement price of 48,680 yuan/mt. A total of 70,850 mt was delivered.

Aluminium: As shorts and longs diverged, the SHFE 1809 contract traded rangebound around the 14,000 yuan/mt level during the day after it touched a low of 13,970 yuan/mt. Open interest of all SHFE aluminium contracts increased 7,566 lots to 657,862 lots. We expect 1809 to remain weak in the short term as alumina prices rebound but consumption weakens.

Nickel: The SHFE 1809 contract traded below its daily moving average and fell during the day as investors were cautious in going long. Its KDJ lines converged and the MACD green line lengthened. We expect the contract to hover just above 110,000 yuan/mt tonight. Market participants would take cues from the US retail sales in June.

Zinc: The SHFE 1809 contract tumbled during the day with massive sell-offs by shorts. It is likely to test support at the 20,000 yuan/mt level tonight. The SHFE 1807 contract completed delivery today with a settlement price of 21,020 yuan/mt and delivery volume of 3,450 mt.

Lead: A slump in SHFE zinc in the afternoon dragged the SHFE 1808 contract to a low of 18,990 yuan/mt with existing longs. While the contract gained 115 yuan/mt from last Friday to close at 19,005 yuan/mt, market participants are expected to retain a bearish outlook in the short run, as open interests declined 2,678 lots to 50,182 lots during the day. The contract is seen testing support at 19,000 yuan/mt tonight.The SHFE 1807 contract was delivered today, with a settlement price of 19,665 yuan/mt and delivery volume of 13,025 mt.

Tin: The SHFE 1809 contract mostly hovered in a narrow range around 145,200 yuan/mt, and dipped in the afternoon to close at 144,950 yuan/mt, up 190 yuan/mt from last Friday. Open interests fell 550 lots to 29,080 lots. Pressure was seen from slower-than-expected growth of China’s gross domestic product (GDP) in the second quarter. We expect the contract to consolidate at 145,000 yuan/mt level in the short term.