SMM Evening Comments (Sep 3)

Published: Sep 03, 2018 18:25 (GMT+8)

Save

SMM Evening Comments

SHANGHAI, Sep 3 (SMM) –

Copper: The November contract became the most active SHFE copper contract today. The SHFE 1811 contract notched a new two-week low at 47,850 yuan/mt after Caixin reported that the purchasing managers’ index (PMI) for China’s manufacturing sector hit a 14-month low in August. It then rebounded and closed the trading day 0.86% lower at 48,150 yuan/mt. Open interest for the SHFE copper contracts increased above 600,000 lots today. We expect the contract to trade at 48,000-48,200 yuan/mt tonight.

Aluminium: The dominant contract moved from the SHFE 1810 to the SHFE 1811 contract, which saw open interests rising 13,166 lots to 251,000 lots. The 1811 contract tested resistance at the 15,000 yuan/mt level twice but failed. Strong support was seen at 14,800 yuan/mt. The US will decide on potential tariffs on $200 billion of Chinese goods this week, and this grew market concerns. Tonight, the contract may continue to test pressure at the five-day moving average above.

Zinc: The SHFE 1810 contract regained some losses and settled the trading day 0.42% lower at 21,195 yuan/mt after it plunged past 21,000 yuan/mt to the 20,850 yuan/mt level. Open interest for the contract shrank 10,212 lots to 202,480 lots. The contract is unlikely to extend its losses tonight given support at the 20- and 40-day moving averages that adhere to each other. SHFE warrants decreased to 2,476 mt today, which is also expected to provide some support to SHFE zinc prices.

Nickel: The SHFE 1811 contract traded rangebound below the daily moving average during the day and closed the trading day 3.2% lower at 105,130 yuan/mt. Open interest for the contract grew some 40,538 lots to 348,066 lots. Its KDJ lines diverged and expanded downwards while the MACD green line lengthened. We expect the contract to hover around 105,100 yuan/mt tonight.

Lead: The SHFE 1810 contract fell below its daily moving average after it jumped to an intraday high of 19,030 yuan/mt. It then recovered some losses and ended the trading day 0.96% higher at 18,865 yuan/mt. Lead was the only SHFE nonferrous metal that ended the trading day in positive territory. Strong pressure was seen at 19,000 yuan/mt. Open interest for the contract grew 906 lots to 65,370 lots. We expect the contract to extend its gains tonight.

Tin: The SHFE 1901 contract fell to close at 145,400 yuan/mt after it hovered around 145,600 yuan/mt. US potential tariffs on Chinese goods worth of $200 billion grew bearish sentiment across the market. The contract is likely to remain rangebound under pressure in the short term with support at 144,500 yuan/mt.

Evening comments Copper Aluminium Zinc Nickel Tin Lead

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or for more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

19 mins ago

Panama Panel Backs Conditional Cobre Panamá Restart to Fund Eventual Closure

A Panamanian ministerial commission has recommended opening formal negotiations with First Quantum Minerals over a potential restart of Cobre Panamá. Under the proposal, the mine could resume operations without expanding its footprint, with operating revenue funding rehabilitation, long-term monitoring and an eventual orderly closure at no cost to the state. Any agreement would require all pending international arbitration claims to be terminated and could not be extended. The report did not specify the scale or duration of a restart. Cobre Panamá previously accounted for around 1% of global copper production. Until an agreement and timetable are confirmed, the near-term impact on copper concentrate supply remains limited.

19 mins ago

20 mins ago

Escondida supervisors vote 95% to authorise strike; talks enter mandatory mediation

Sindicato N°2 de Supervisores y Staff at BHP's Escondida copper mine in Chile rejected the company's final wage offer, with 95% voting to authorise strike action. The union of about 1,020 supervisors objected to limited pay improvements, multi-tasking requirements and a proposed 14x14 shift rotation. Chilean law now mandates at least five days of government mediation, extendable by five more, before any legal walkout. The mine produced 1.26 million tonnes in fiscal 2026, down 3% year on year, with fiscal 2027 guidance of 1.0-1.1 million tonnes. Production is currently unaffected, but the vote compounds supply risk after a fatal accident halted operations in late September.

20 mins ago

48 mins ago

India Has Yet to Decide on Scrapping Pre-Shipment Inspections for Metal Scrap Imports

India has not yet decided whether to remove the pre-shipment inspection requirement for imported metal scrap, the Directorate General of Foreign Trade said on September 30. The authority is reviewing a proposal from the Material Recycling Association of India and remains open to further easing compliance requirements. MRAI has argued that a shortage of India-authorized inspection agencies in several exporting countries is creating certification and logistical constraints for scrap shipments. Reuters India imports around 13 million tonnes of recyclable metal scrap annually from more than 160 countries, with roughly 2,500 containers arriving each day. MRAI has proposed recognizing more overseas inspection agencies and expanding the list of low-risk origins exempt from pre-shipment inspections. DGFT said pre-shipment certification and inspections at Indian ports currently serve different purposes and cannot simply replace each other. Any eventual relaxation could reduce compliance barriers for imported scrap, including copper scrap, and broaden sourcing flexibility for Indian buyers, although no policy change has yet been approved.

48 mins ago