SMM Evening Comments (Sep 28)

SHANGHAI, Sep 28 (SMM) – SHFE nonferrous metals closed mixed while ferrous complex fell for the most part on Friday September 28. 

SHFE zinc grew 1.48%, lead jumped 1.06%, tin increased 0.48%, while copper lost 0.44%, nickel slid 0.48%, and aluminium slumped 1.24%. Rebar plunged 2.71%, hot-rolled coil declined 1.65%, iron ore dipped 1%, and coke went down 0.55%. Coking coal nudged up. 

Copper: The SHFE 1811 contract once fell below the 50,000 yuan/mt level with pressure at the five-day moving average. As shorts exited near closing, the contract inched up to an intraday high of 50,240 yuan/mt and settled at 50,170 yuan/mt. The October contract traded some 230 yuan/mt higher than the November one today. The SHFE will be closed tonight and reopen on Monday October 8 after the week-long National Day holiday. 

Aluminium: The SHFE 1811 contract ceased to rise further after climbed to 14,390 yuan/mt, given limited upward momentum. It registered the fourth consecutive trading day of decline as it closed Friday’s session in green at 14,310 yuan/mt. Eased cut for the following heating season depressed confidence of long positions. We expect the contract to test resistance at the 60-day moving average after the National Day holiday. 

Zinc: The SHFE 1811 contract closed above the Bollinger upper band after rising to an intraday high of 22,010 yuan/mt near closing as shorts exited. Open interests down 400 lots to 190,000 lots during the day.

Nickel: Declining shorts pulled up the SHFE 1811 contract above the 20- and 10- day moving averages, to a high of 104,580 yuan/mt. The contract settled at 104,550 yuan/mt with capitals of some 213 million yuan flowing out of all SHFE nickel contracts. Open interests of the 1811 contract lost 20,000 lots to 184,000 lots. Data to watch tonight include the US August personal consumption expenditures (PCE) inflation, personal income and spending and September consumer confidence.

Lead: The SHFE 1811 contract broke its rangebound trend during Thursday as it traded robustly today and surged to a high of 18,175 yuan/mt. It settled at 18,115 yuan/mt with open interests down 2,300 lots to 51,516 lots. 

Tin: The SHFE 1901 contract fell after surged to a high of 148,840 yuan/mt as longs took profits and left. Development of relocation for mineral processing plants in Gejiu of Yunnan province will be closely monitored. Pressure above is set at 150,000 yuan/mt.