SMM Evening Comments (Jan 24)

SHANGHAI, Jan 24 (SMM) – SHFE nonferrous metals ended mixed on Thursday. Aluminium gained 0.5%, tin and lead advanced 0.4% while zinc dipped 0.1%, nickel lost 0.2% and copper slipped 0.4%.

The ferrous complex also traded mixed. Iron ore rose 1.6%, rebar and hot-rolled coil climbed 0.1% while coke edged down 0.02% and coking coal fell 0.5%

Copper: The SHFE 1903 contract fluctuated during the day and failed to pare overnight losses. It finished the trading day 0.4% lower at 47,320 yuan/mt. The contract continued to trade rangebound. Tonight, it is expected to try to hang on above 47,260 yuan/mt, the lowest of the day.

Aluminium: The SHFE 1903 contract slipped to 13,525 yuan/mt in early afternoon trades. As shorts cut their bets, the contract recovered some losses to close at 13,550 yuan/mt, up 0.5% on the day. It is expected to test the 40-day moving average tonight.

Zinc: With bearish sentiment, the SHFE 1903 contract fell during the day, erasing overnight gains and ending in the red at 21,480 yuan/mt. This forced it to decline 0.1% on the day. Open interest for the February and March contracts shrank over 20,000 lots. Spot premiums sharply declined as the start of the Chinese New Year break across downstream consumers reduced consumption. This is set to erode upward momentum in SHFE zinc, which is expected to trade rangebound around the upper Bollinger band tonight.

Nickel: After hovering around the daily moving average in the morning, the SHFE 1905 contract slid in the afternoon and finished the trading day 0.2% lower at 93,590 yuan/mt. Its KDJ lines expanded downwards with a shorter MACD red bar. The contract is likely to try to hold onto the 93,600 yuan/mt level tonight.

Lead: Affected by a weak SHFE zinc, the SHFE 1903 lead contract sank after initial gains. It closed the trading day 0.4% higher at 17,605 yuan/mt. Despite a strong LME zinc, the contract remained rangebound as the end of stockpiling across battery producers quieted trading activity. The contract is unlikely to shrug off the resistance at the 60-day moving average in the short run and is expected to hover between the 20- and 40-day moving averages tonight.

Tin: The SHFE 1905 contract moved above the daily moving average for much of the daytime trade. It ended the trading day 0.4% higher at 148,250 yuan/mt. It was the first day that the contract closed higher than overnight open in the past seven trading days.