SMM Evening Comments (Aug 31)

Published: Aug 31, 2018 18:18

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SMM Evening Comments

SHANGHAI, Aug 31 (SMM) –

Copper: The SHFE 1810 contract fell to a low of 48,370 yuan/mt before it rebounded to a high of 48,750 yuan/mt and ended the trading day 0.33% lower at 48,580 yuan/mt. The offshore yuan fell to 6.85 per dollar again, indicating that the depreciation of the currency is unlikely to cease in the short term. The central bank’s reviving “counter-cyclical factor” failed to provide much support to the yuan. A small growth in Chinese economic activity and persisting trade disputes with the US capped the upward momentum in SHFE copper prices. We expect the contract to hover around its daily moving average within a wide range tonight.

Aluminium: The SHFE 1810 contract climbed to a high of 14,955 yuan/mt after it hovered around 14,875 yuan/mt. It then lost its gains and settled the trading day 0.53% lower at 14,890 yuan/mt. Open interest for SHFE aluminium contracts shrank 8,572 lots to 759,122 lots. We expect the contract to test the five-day moving average tonight.

Zinc: The SHFE 1810 contract climbed to a high of 21,620 yuan/mt before it met significant resistance at the 60-day moving average and closed the trading day 1.53% higher at 21,565 yuan/mt. SHFE zinc prices received some support from declines in zinc domestic inventories. We expect the contract to remain under pressure at the 60-day moving average tonight.

Lead: The SHFE 1810 contract shrugged off its overnight rangebound trading and soared past several moving averages during the day. It notched a new high in a month, at 18,985 yuan/mt, and closed 1.68% higher at 18,810 yuan/mt. Open interest for the contract grew 1,628 lots to 64,464 lots. Some 50 million yuan entered the contract in the past two days and we expect it to extend its gains tonight. Besides, open interest for the 1811 contract gained 5,758 lots, reflecting the bullish outlook that investors have on SHFE lead prices.

Nickel: Shorts added 16,000 lots and the SHFE 1811 contract plunged to close at 107,600 yuan/mt, down 2.12% from the previous day. About 249 million yuan flowed into the SHFE nickel complex, the most among nonferrous metals. The contract’s KDJ lines expanded downwards and the MACD green line lengthened. We expect it to hover around 108,000 yuan/mt tonight.

Tin: The SHFE 1901 contract declined after it rose to an intraday high of 147,380 yuan/mt, but received support at the daily moving average. It closed at 146,380 yuan/mt, up 480 yuan/mt from Thursday, with open interests up 416 lots to 30,836 lots. Tight supplies of tin ore is likely to improve investor sentiment, and we expect the contract to face resistance at the 20-day moving average in the short run.

Evening comments Copper Aluminium Zinc Nickel Tin Lead

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