SMM Evening Comments (Jun 11)

SHANGHAI, Jun 11 (SMM) – SHFE nonferrous metals extended their increases across the board on Tuesday June 11. Copper, tin, and nickel advanced more than 1%, zinc expanded 0.96%, aluminium gained 0.54%, and lead rose 0.22%. 

The ferrous complex also ended higher as iron ore surged 6%, coke jumped 3.66%, rebar expanded 3.51%, coking coal grew 2.75%, and hot-rolled coil went up 2.7%. 

Copper: The most-traded SHFE August contract extended gains from overnight as risk aversion eased following the settlement of the US-Mexico deal to avoid tariffs. Accumulated longs boosted the contract to a high of 46,940 yuan/m to test the 20-day moving average, before it ended 1.45% higher on the day at 46,900 yuan/mt. Open interests climbed by almost 15,000 lots to 222,000 lots. As the KDJ indicators expanded upwards and the MACD indicators turned red, supportive factors are likely to keep the contract testing pressure from 47,000 yuan/mt tonight. 

Aluminium: The most-active SHFE contract moved to the August contract, which climbed along with the five-day moving average, to a high of 13,985  yuan/mt. It finished at that level, up 0.54% on the day. This ended two consecutive trading days of decline. While improved sentiment bolstered base metals in the afternoon, fundamentals limited the growth in aluminium prices. The MACD green line of the contract shortened and the KDJ indicators expanded upwards. Tonight, the market should monitor changes in short positions. 

Zinc: Departing shorts buoyed the most-traded SHFE August contract twice today, to an intraday high of 20,510 yuan/mt, just before it closed 0.96% higher on the day at 20,445 yuan/mt. Open interests lost 7,552 lots to 245,000 lots. It tested pressure from the Bollinger middle band, with bullish signs around the MACD indicators indicating upward momentum. However, concerns about growing supplies are likely to limit its upside room and keep it around the Bollinger middle band tonight. 

Nickel: The most-liquid SHFE July contract shrugged off resistance from the five-day moving average and tested the 20-day moving average as macroeconomic sentiment improved in the afternoon. News about Indonesian floods affecting shipments of nickel ore also bolstered prices. Prices jumped to an intraday high of 97,870 yuan/mt and ended at 97,250 yuan/mt, up 1.01% on the day. Open interests shrank 800 lots to 174,000 lots. It may manage to stand firm above the five-day moving average tonight.  

Lead: As shorts loaded up their positions at highs around 16,270 yuan/mt, the most-active SHFE July contract dipped to an intraday low of 16,160 yuan/mt, and ended 0.22% higher on the day at 16,180 yuan/mt. With continued pressure from the 16,300 yuan/mt level, the contract is expected to test support from the five-day moving average tonight. 

Tin: The most-liquid SHFE September contract traded rangebound today after it climbed to highs around 144,920 yuan/mt right after opening. With an intraday high of 145,620 yuan/mt, it ended 1.25% higher on the day at 145,490 yuan/mt. Support from the 10-day moving average and exiting shorts accounted for the increase. Pressure above is expected at 146,000 yuan/mt tonight.