SMM Evening Comments (Oct 12)

SHANGHAI, Oct 12 (SMM) – SHFE nonferrous metals closed Friday up across the board as lead led the increases and rose 1.91%. Copper grew 1.38%, zinc climbed up 1.03%, nickel jumped 0.81%, tin went up 0.3%, and aluminium closed 0.25% higher.

Ferrous complex also strengthened with coke rising 3.35%. Rebar gained 2.09%, hot-rolled coil increased 1.16%, coking coal rose 0.99%, and iron ore nudged up 0.59%.

Copper: The SHFE 1811 contract was pulled up by a stronger LME copper, to a high of 50,850 yuan/mt. It settled at 50,800 yuan/mt with capitals of some 361 million yuan flowing into all SHFE copper contracts. We see the 1811 contract testing support at the ten-day moving average tonight. 

Aluminium: As global stock markets rebounded on Friday, longs buoyed the SHFE 1812 contract to an intraday high of 14,345 yuan/mt. It closed at 14,325 yuan/mt with open interests down 4,720 lots to 226,000 lots. The contract will continue to test pressure above at the five-day moving average tonight. 

Zinc: The SHFE 1811 contract rallied from below the five-day moving average, and climbed up to a high of 22,935 yuan/mt amid exiting shorts. With pressure at 23,000 yuan/mt, it settled at 22,850 yuan/mt, up 235 yuan/mt from Thursday. We expect the contract to test resistance at 23,000 yuan/mt tonight. 

Nickel: The SHFE 1901 contract broke pressure at the 10-day moving average and rose to an intraday high of 105,980 yuan/mt as longs entered the market. Open interests increased 10,000 lots to 185,000 lots. As its KDJ indicators expanded upward and the MACD red line lengthened, the contract is expected to hover around 105,500 yuan/mt tonight. Key factors to watch tonight include the University of Michigan consumer sentiment index for October. 

Lead: The SHFE 1811 contract traded between the Bollinger middle and upper bands with pressure at 18,670 yuan/mt during the day. As longs took profit and left, the contract fell from a high of 18,750 yuan/mt, but still gained 345 yuan/mt to settle at 18,600 yuan/mt. It is seen testing pressure at the Bollinger upper band tonight. 

Tin: While SHFE base metals rose across the board, the SHFE 1901 contract was pulled up sharply by longs for two times during the day. It declined from a high of 149,000 yuan/mt and closed at 147,710 yuan/mt. Pressure above is seen at 149,000 yuan/mt tonight.