SMM Evening Comments (Jun 10)

SHANGHAI, Jun 10 (SMM) – SHFE nonferrous metals, except for aluminium, ended higher across the board on Monday June 10. Zinc led the increases and rose 1.35%, lead gained 1%, tin climbed 0.7%, nickel jumped 0.64%, and copper expanded 0.43%. 

The ferrous complex also closed higher as iron ore jumped 3.18%, coking coal advanced 2.8%, coke grew 0.66%, and hot-rolled coil and rebar nudged up. 

Copper: Better-than-expected Chinese trade data bolstered the most-traded SHFE July contract above the 46,000 yuan/mt level, to an intraday high of 46,340 yuan/mt, before it ended 0.43% higher on the day at 46,250 yuan/mt. However, continued pressure from the US dollar is likely to keep the contract testing support from 45,800 yuan/mt tonight. 

Aluminium: Promising domestic trade data for May failed to lift the most-active SHFE July contract as the market believed trade worries caused the higher exports. The contract fell to the lowest since May 7, at 13,915 yuan/mt, before support from the five-day moving average ended it at 13,940 yuan/mt, down 0.5% on the day. The MACD green line lengthened and the KDJ indicator expanded downwards. Slower decline in social stocks of primary aluminium and expectations of poor demand in June will limitedly rally aluminium prices tonight. 

Zinc: The SHFE July contract retreated after it climbed to a high of 20,825 yuan/mt, but still ended 1.35% higher on the day at 20,660 yuan/mt. Market sentiment improved after the US suspended tariffs on Mexican products on Friday. However, higher domestic inventories of refined zinc amid output recovery will limit any upward momentum in the contract tonight. The most-active contract shifted to the August contract, which closed 1.33% higher at 20,255 yuan/mt. The August contract is expected to trade around the 20-day moving average tonight. 

Nickel: The most-liquid SHFE July contract ended its four consecutive trading days of decline as it closed 0.64% higher on the day at 96,230 yuan/mt. It found support from the daily moving average after it slid from an intraday high of 96,950 yuan/mt. We see it testing pressure from the five-day moving average tonight.  

Lead: News about maintenance at a smelter affecting output by 2,000 mt refined lead drove longs to enter, and bolstered the most-active SHFE July contract to a high of 16,275 yuan/mt. It closed 0.96% higher on the day at 16,220 yuan/mt, with the five-day moving average moving upwards. The contract is expected to test pressure from the 40-day moving average tonight. 

Tin: The most-traded SHFE September contract jumped swiftly to an intraday high of 144,440 yuan/mt as investors covered their shorts and added longs. It finished the trading day 0.7% higher at 144,300 yuan/mt. Pressure is expected at the 20-day moving average, or the 144,800 yuan/mt level tonight.