SMM Evening Comments (May 15)

SHANGHAI, May 15 (SMM) – SHFE nonferrous metals closed higher across the board on Wednesday, as investors took a breather from a recent escalation between the US and China.

Zinc saw the biggest gain of 1.6%, nickel rose close to 1.3%, lead climbed 1.2%, aluminium advanced 1.1%, copper gained close to 0.5% and tin crept up 0.4%.

The ferrous complex also traded higher. Coking coal rose close to 1.6%, coke increased by 1.5%, iron ore went up 1.2%, hot-rolled coil gained 1% and rebar advanced close to 0.9%.

Copper: Following a strong rally in London, the most traded SHFE July contract recovered from overnight losses to close the trading day 0.46% higher at 47,730 yuan/mt. With support from the lower Bollinger band, the contract is expected to test the 47,800 yuan/mt level tonight. A total of 456 million yuan entered the SHFE copper complex on the day. The May contract settled at 47,480 yuan/mt, with 39,025 mt delivered.

Aluminium: The most active SHFE July contract continued its overnight growth during the day, and ended the trading day 1.13% higher at 14,340 yuan/mt. The loading up of long positions accounted for today’s gains. Rising prices of alumina accounted for the recent robust performance in SHFE aluminium. The contract is expected to hover at highs tonight, between 14,280-14,350 yuan/mt.

Zinc: As longs added their positions, the most traded SHFE July contract extended overnight gains to end the trading day 1.6% higher at 20,965 yuan/mt. SHFE zinc stemmed its recent declines and rebounded towards the key 21,000 yuan/mt level. Tighter spot supplies offered some support to SHFE zinc. The May contract finished its last trading day higher, with settlement price of 21,260 yuan/mt. A total of 26,500 mt was delivered.

Nickel: Following overnight gains, the most liquid SHFE July contract rose further during the day. It ended at 97,230 yuan/mt, up 1.25% on the day and standing above the 10-day moving average. Its KDJ lines diverged and expanded upwards, with a shortened MACD green bar. The May contract settled at 96,560 yuan/mt.

Lead: The most active SHFE June contract extended overnight gains, breaking through the five-day moving average, to finish the trading day 1.23% higher at 16,065 yuan/mt. The contract is likely to see limited downside this week after such a sharp increase. It is expected to trade rangebound and test resistance from the 10-day moving average. The May contract settled at 15,960 yuan/mt, with 6,025 mt being delivered.

Tin: The most traded SHFE September recovered some ground after it relinquished most of overnight gains. It ended 0.36% higher at 145,950 yuan/mt, near the five-day moving average. Support is seen at 145,000 yuan/mt while resistance is at 147,000 yuan/mt.