SMM Evening Comments (Nov 2)

Published: Nov 02, 2018 17:09 (GMT+8)

Save

SMM Evening Comments

SHANGHAI, Nov 2 (SMM) – While improved macroeconomic developments buoyed SHFE nonferrous contracts across the board, ferrous complexes mostly extended their declines on Friday.

SHFE copper led increases and rose 2.11%, nickel grew 1.76%, zinc jumped 1.7%, lead gained 1.13%, tin went up 0.62%, and aluminium closed 0.32% higher.

Hot-rolled coil nudged up 0.11%, while iron ore slumped 3.51%, coking coal lost 2.54%, rebar declined 0.85%, and coke fell 0.57%.

Copper: A weaker US dollar index bolstered the SHFE 1901 contract to a high of 49,960 yuan/mt in the afternoon, after the contract struggled around 49,135 yuan/mt in the morning. It closed at 49,830 yuan/mt, with open interests down 3,264 lots. Some 157 million yuan of capital left all SHFE copper contracts, the greatest among base metals. Currently between the Bollinger middle and lower bands, the 1901 contract may see more shorts leaving the market tonight. It will test pressure above at the 50,000 yuan/mt level tonight.

Aluminium: As SHFE base metals contracts rallied across the board in the afternoon, the SHFE 1901 contract also broke pressure at the daily moving average and rose to an intraday high of 14,010 yuan/mt. Without strong support, the contract edged down from highs to settle at 13,970 yuan/mt. We expect do not expect this surge to sustain tonight.

Zinc: Improved market sentiment pulled the SHFE 1901 contract fast above the five-day moving average after it fell below the 40-day moving average. A continued decline in SMM zinc social inventories data also grew confidence across longs. We expect the contract to extend its robust trend tonight, and to stand firm above the five-day moving average.

Nickel: The SHFE 1901 contract ended its six consecutive trading days of decline as it grew 1,710 yuan/mt from Thursday to close at 98,680 yuan/mt, buoyed by positive macroeconomic sentiment. Open interests shrank 57,000 lots, with shorts accounting for the majority. We expect the contract to test support at the five-day moving average and try to stand above 100,000 yuan/mt tonight as its MACD green line shortened. Investors may take more cues tonight from the US unemployment data for October, its durable goods orders, and factory orders data for September.

Lead: Investors added longs and cut shorts on expectations of eased trade tension between China and the US, and this buoyed the SHFE 1812 contract to a high of 18,765 yuan/mt near closing. The contract settled at 18,750 yuan/mt, approaching the Bollinger upper band and above all moving averages. We see it testing resistance above at 18,900 yuan/mt tonight.

Tin: After trading rangebound around 145,800 yuan/mt in the morning, the SHFE 1901 contract received support from existing shorts and rising SHFE base metals, and jumped to close at 146,640 yuan/mt. The strong trend is likely to extend tonight. Pressure above is set at 147,000 yuan/mt.

Evening comments Futures movement

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

6 hours ago

Stillwater East and Columbus workers ratify deal ending strike

[SMM PGM Flash] Sibanye-Stillwater has announced that workers at its Stillwater East platinum-and-palladium mine and Columbus metallurgical facility in Montana ratified a collective agreement with the United Steelworkers. It runs retroactively from 1 June 2026 to 31 May 2029 and provides a 4.5% first-year wage rise, followed by the greater of 3.5% or CPI in year two and 3.0% or CPI in year three. The ratification ends strike action dating from 3 September. Employees are expected, not confirmed, to resume scheduled duties on the day shift on 9 October. If that return occurs, the agreement removes the immediate labour stoppage affecting these US PGM sites. It is distinct from the East Boulder settlement announced on 30 September, although Sibanye says both agreements support mechanisation, team incentives and benefit alignment. The company did not quantify lost output or provide a production-recovery timetable.

6 hours ago

12 hours ago

Post-holiday silver prices fell to consolidate at lows, with nonfarm payrolls shock and hawkish minutes in a tug of war [SMM Silver Weekly Review]

[SMM Silver Weekly Review: Silver Prices Consolidate at Lows After Post-Holiday Catch-Up Decline as Weak Nonfarm Payrolls Clash with Hawkish Fed Minutes] On the first trading day after the holiday, silver prices played catch-up to the downside. The most-traded SHFE silver contract fell 2.16% to 14,605 yuan/kg, while COMEX silver broke below $60. The US Fed's September minutes leaned hawkish, the dollar broke above 102, and US Treasury yields hit multi-year highs, continuing to pressure prices. However, the surprisingly weak nonfarm payrolls data marginally cooled rate hike expectations, while central bank gold purchases and ETF inflows provided mid-term support. Spot inquiry activity improved, with transactions leaning toward parity. In the short term, prices are likely to consolidate at lows as the market repairs, with attention on CPI data and US Fed speeches for guidance.

12 hours ago

Platinum and palladium saw sharp catch-up declines after the holiday; buying on dips was active, and spot supply remained tight [SMM Platinum and Palladium Weekly Review]

On the first trading day after the National Day holiday, platinum and palladium posted sharp catch-up declines. The most-traded platinum contract fell 3.37% to 406.05 yuan/g, while palladium dropped 6.95% to 271.9 yuan/g, hitting a record low since listing. The overseas market remained under pressure during the holiday, dragged notably by US Treasury yields breaking above 5% and a stronger US dollar. In the spot market, buying interest on dips strengthened, trading was active, supply was tight, and suppliers held prices firm, with spot prices falling less than futures. Further sharp downside appears limited in the near term, and prices may consolidate at lows. Watch for signals from CPI and the FOMC.

12 hours ago