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SMM Evening Comments (Aug 28)
Aug 28,2018 17:32CST
price review forecast
Source:SMM
SMM Evening Comments

SHANGHAI, Aug 28 (SMM) – SHFE nonferrous metals, except for copper, closed higher on Tuesday. Aluminium jumped 1.18%, zinc rose 1.11%, tin increased 0.53%, lead gained 0.38% and nickel inched up 0.22%.

The ferrous complex closed mixed with coking coal up 2.39%. Hot-rolled coil gained 0.71% while coke lost 0.31%, iron ore dropped 0.52% and rebar fell 0.68%.

Copper: The SHFE 1810 contract rebounded and closed the trading day 0.21% lower at 48,650 yuan/mt after it fell to an intraday low of 48,410 yuan/mt. The contract managed to stand above the five-day moving average but met much pressure at 49,000 yuan/mt during the day. Some 84.96 million yuan flowed out of the SHFE copper complex today, compared to a 118-million-yuan inflow to the nonferrous complex. We expect the contract to hover at 48,500-49,000 yuan/mt tonight. Market participants tonight can take some cues from the  August consumer confidence in the US and July M3 money supply in the euro area.

Aluminium: As longs flooded in, the SHFE 1810 contract soared to an intraday high of 15,000 yuan/mt and its open interests surged more than 10,000 lots in the last 20 minutes before close. This came after news that Alcoa’s alumina refineries in Western Australia (WA) have delayed their shipments. Workers continued their strike at Alcoa refinery plants and bauxite mines in WA. The contract rose 1.18% during the trading day and closed at 14,970 yuan/mt.

Zinc: The SHFE 1810 contract regained early losses, climbed to a high of 21,500 yuan/mt and ended the trading day 1.11% higher at 21,495 yuan/mt. SHFE warrants extended their declines today. This generated large inflows of funds and bolstered SHFE zinc prices. We expect the contract to continue its strong performance tonight.

Nickel: The SHFE 1811 contract rebounded from a low around the 108,000 yuan/mt level, as domestic low inventories and active downstream purchases provided some support. As shorts exited, the contract climbed up to approach 109,500 yuan/mt and closed at 109,400 yuan/mt. Open interests lost 7,628 lots to 286,000 lots. As its MACD green line shortened, we expect the contract to consolidate around 109,000 yuan/mt tonight.

Lead: The SHFE 1810 contract jumped to an intraday high of 18,430 yuan/mt before it fell to a low of 18,270 yuan/mt. Bolstered by strong performances across nonferrous metals, the contract rebounded and settled 0.38% higher at 18,410 yuan/mt. The contract traded between the middle and upper Bollinger bands during the day, with strong pressure at the 60-day moving average. We expect it to continue its rangebound pattern tonight.

Tin: The SHFE 1901 contract mostly hovered around the daily moving average today while jumped to a high of 146,620 yuan/mt near closing as shorts left and longs increased. It closed at 146,600 yuan/mt, 770 yuan/mt higher from Monday. As its KDJ indicators expanded upwards, the contract may extend its gains and approach the 40-day moving average above in the short run.

Evening comments
Copper
Aluminium
Zinc
Nickel
Tin
Lead

For queries, please contact Frank LIU at liuxiaolei@smm.cn

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