SMM Evening Comments (Jan 7)

SHANGHAI, Jan 7 (SMM) – SHFE nonferrous metals, except lead, ended in the black on Monday January 7. Nickel climbed 2.2%, copper and zinc jumped some 1.4%, tin gained close to 0.6% and aluminium rose 0.5%. Lead stayed flat.

The ferrous complex also broadly climbed higher. Rebar, hot-rolled coil and iron ore climbed 1.8%. Coke and coking coal increased by 1.5%.

Copper: The SHFE 1903 contract traded in a tight range and held onto most of its Friday night gains during the day. It ended the trading day 1.4% higher at 47,430 yuan/mt. Some 218 million yuan left the SHFE copper complex today, the most among nonferrous metals. The contract now stands between the middle and lower Bollinger bands, with a shorter MACD green bar. It is expected to try to break 47,800 yuan/mt tonight.

Aluminium: The SHFE 1903 contract failed to perform strongly as the impact from the central bank’s announcement of liquidity injection on Friday faded. It finished the trading day 0.5% higher at 13,460 yuan/mt. It is expected to remain rangebound tonight.

Zinc: The SHFE 1903 contract extended Friday night gains to close the trading day 1.4% higher at 20,250 yuan/mt. Resistance remained at the 10-day moving average. Gains in social inventories of refined zinc across Shanghai, Guangdong and Tianjin over the weekend and an anticipated well-supplied market are likely to limit upside room in SHFE zinc prices. The contract is likely to hover in a tight range, under the pressure at the 10-day moving average, tonight.

Lead: The SHFE 1902 contract clawed back earlier losses during the day and closed at 17,670 yuan/mt. The downtrend in SHFE lead prices sustained with support at 17,550 yuan/mt.

Nickel: The SHFE 1905 contract held onto most of its Friday night gains during the day and finished the trading day close to 2.2% higher at 90,830 yuan/mt. Its KDJ lines diverged and expanded upwards with an extended MACD red bar. The contract is likely to try to stand firmly above the 40-day moving average tonight.

Tin: The SHFE 1905 contract pared earlier losses during the day and ended at 145,050 yuan/mt, near the 10-day moving average and up 0.6% on the day. The five-day moving average will provide support while resistance will come from the 20-day moving average.