SMM Evening Comments (May 16)-Shanghai Metals Market

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SMM Evening Comments (May 16)

Price Review & Forecast 06:13:00PM May 16, 2019 Source:SMM

SHANGHAI, May 16 (SMM) – SHFE nonferrous metals closed higher across the board, with the biggest gain of close to 2% in lead. Zinc climbed 1.3%, nickel rose 1.2%, tin gained 0.5%, copper and aluminium advanced about 0.4%.

The ferrous complex also saw strong performance. Iron ore advanced 4.8%, rebar climbed 1.8%, coking coal increased by 1.4%, coke gained 1.3% and hot-rolled coil rose 1.2%.

Copper: The most traded SHFE July contract fluctuated during the day to end at 47,790 yuan/mt, up 0.4% on the day. It steadied above the lower Bollinger band, with its KDJ lines shaping a golden cross. A total of 278 million yuan fled from the SHFE copper complex on the day. The market tonight is likely to look for clues from its LME counterpart, with the 48,000 yuan/mt level in focus.

Aluminium: The most active SHFE July contract traded rangebound at highs during the day, holding onto overnight gains to close 0.35% higher at 14,335 yuan/mt. Open interest for the contract gained 14,170 lots on the day, with the buildup of long positions accounting for the majority. Recent strong performance in SHFE aluminium was in part bolstered by rising prices of alumina. SMM data showed that social inventories of primary aluminium in China continued to fall this week, down 63,000 mt from a week ago, pointing to robust demand. The contract is expected to hover between 14,300-14,400 yuan/mt tonight.

Zinc: The most liquid SHFE July contract recovered from earlier losses to close at 21,085 yuan/mt, up 1.27% on the day. The contract has risen for two consecutive days, and is expected to stand firmly above the 10-day moving average tonight, with support from the physical market.

Nickel: The most traded SHFE July contract hovered around 97,800 yuan/mt in a narrow range during the day, and held onto overnight gains to finish the trading day 1.19% higher at 97,850 yuan/mt. Open interest for the contract expanded 17,566 lots on the day. Its KDJ lines diverged and expanded upwards, with the MACD bar turning red. The contract is expected to try to steady at 98,000 yuan/mt.

Lead: As shorts covered their positions, the most active SHFE June contract extended overnight gains to finish the trading day 1.97% higher at 16,275 yuan/mt. After two consecutive days of sharp gains, the contract managed to stand above the 10-day moving average, with the five-day one expanding upwards. If LME lead could continue its strong performance during European trading hours, SHFE lead will likely stand firmly above the 10-day moving average and test the 20-day one tonight.

Tin: Short-covering helped the most traded SHFE September contract recover from overnight losses to close the trading day 0.49% higher at 146,590 yuan/mt, above the five-day moving average. Resistance is seen at 147,300 yuan/mt while support is at 145,000 yuan/mt. 

Key Words:  Evening comments  Copper  Aluminium  Zinc  Nickel  Tin  Lead 

SMM Evening Comments (May 16)

Price Review & Forecast 06:13:00PM May 16, 2019 Source:SMM

SHANGHAI, May 16 (SMM) – SHFE nonferrous metals closed higher across the board, with the biggest gain of close to 2% in lead. Zinc climbed 1.3%, nickel rose 1.2%, tin gained 0.5%, copper and aluminium advanced about 0.4%.

The ferrous complex also saw strong performance. Iron ore advanced 4.8%, rebar climbed 1.8%, coking coal increased by 1.4%, coke gained 1.3% and hot-rolled coil rose 1.2%.

Copper: The most traded SHFE July contract fluctuated during the day to end at 47,790 yuan/mt, up 0.4% on the day. It steadied above the lower Bollinger band, with its KDJ lines shaping a golden cross. A total of 278 million yuan fled from the SHFE copper complex on the day. The market tonight is likely to look for clues from its LME counterpart, with the 48,000 yuan/mt level in focus.

Aluminium: The most active SHFE July contract traded rangebound at highs during the day, holding onto overnight gains to close 0.35% higher at 14,335 yuan/mt. Open interest for the contract gained 14,170 lots on the day, with the buildup of long positions accounting for the majority. Recent strong performance in SHFE aluminium was in part bolstered by rising prices of alumina. SMM data showed that social inventories of primary aluminium in China continued to fall this week, down 63,000 mt from a week ago, pointing to robust demand. The contract is expected to hover between 14,300-14,400 yuan/mt tonight.

Zinc: The most liquid SHFE July contract recovered from earlier losses to close at 21,085 yuan/mt, up 1.27% on the day. The contract has risen for two consecutive days, and is expected to stand firmly above the 10-day moving average tonight, with support from the physical market.

Nickel: The most traded SHFE July contract hovered around 97,800 yuan/mt in a narrow range during the day, and held onto overnight gains to finish the trading day 1.19% higher at 97,850 yuan/mt. Open interest for the contract expanded 17,566 lots on the day. Its KDJ lines diverged and expanded upwards, with the MACD bar turning red. The contract is expected to try to steady at 98,000 yuan/mt.

Lead: As shorts covered their positions, the most active SHFE June contract extended overnight gains to finish the trading day 1.97% higher at 16,275 yuan/mt. After two consecutive days of sharp gains, the contract managed to stand above the 10-day moving average, with the five-day one expanding upwards. If LME lead could continue its strong performance during European trading hours, SHFE lead will likely stand firmly above the 10-day moving average and test the 20-day one tonight.

Tin: Short-covering helped the most traded SHFE September contract recover from overnight losses to close the trading day 0.49% higher at 146,590 yuan/mt, above the five-day moving average. Resistance is seen at 147,300 yuan/mt while support is at 145,000 yuan/mt. 

Key Words:  Evening comments  Copper  Aluminium  Zinc  Nickel  Tin  Lead