SMM Evening Comments (Nov 14)

SHANGHAI, Nov 14 (SMM) – SHFE nonferrous metals closed mixed. Nickel dropped 1%, zinc slid 0.91%, aluminium lost 0.36% and copper dipped 0.16% while tin gained 0.17% and lead climbed 0.36%.

The ferrous complex, except for iron ore, ended in the black. Coke jumped 1.9%, rebar surged 1.8%, coking coal increased 0.93% and hot-rolled coil inched up 0.25%.

Copper: As shorts built their positions, the SHFE 1901 contract fell to close at 48,820 yuan/mt today. This reversed mild gains overnight and dragged the contract below the five-day moving average, near the lower Bollinger band. Open interest for the 1901 contract grew 2,856 lots to about 200,000 lots. A total of 101 million yuan left the SHFE copper complex today, the most among nonferrous metals. Market participants should monitor whether the contract can hold on to the 48,700 yuan/mt level tonight.

Aluminium: The SHFE 1901 contract came off from earlier rangebound levels to close near the day’s lows of 13,715 yuan/mt. This positioned it below all moving averages with its KDJ lines diverging and expanding downwards. We do not expect the contract to rebound significantly tonight as investors work through China's weak October loan data.

Zinc: As shorts aggressively built their bets, the SHFE 1901 contract plunged to the day’s low of 20,680 yuan/mt before it recovered some losses to close at 20,765 yuan/mt. Market participants should monitor whether the contract can hold on to the 60-day moving average tonight.

Nickel: The SHFE 1901 contract reversed earlier gains and closed at 93,920 yuan/mt. Its KDJ line diverged and expanded downwards while the MACD green line extended. The contract is expected to remain weak with pressure from 94,000 yuan/mt tonight.

Lead: The SHFE 1812 contract traded rangebound around the daily moving average to finish the day at 18,505 yuan/mt. The 1901 contract became the most traded SHFE lead contract today. Longs added and shorts cut their positions ahead of the closing bell. This helped the contract to close near the day’s highs of 18,105 yuan/mt. SHFE lead continued to trade rangebound around 18,000 yuan/mt with moving averages holding steady. It is likely to continue to trade rangebound tonight.

Tin: The SHFE 1901 contract rebounded into positive territory to close at 152,040 yuan/mt on news that Gejiu Zili Metallurgy would undergo maintenance for 30 days. SHFE tin remained strong today with resistance at 153,000 yuan/mt.