SMM Evening Comments (Jun 17)

SHANGHAI, Jun 17 (SMM) – SHFE nonferrous metals mostly decreased on Monday June 17 as nickel lost 0.56%, tin fell 0.32%, copper dropped 0.67%, lead declined 0.67%, zinc went down 1%, aluminium eased 0.79%, while lead grew 0.31%. 

The ferrous complex also ended lower. Iron ore fell 2.41%, coking coal slid 1%, coke cut 3%, rebar lost over 2%, and hot-rolled coil closed more than 1.5% lower. 

Copper: Pressure from the 10-day moving average kept the most-traded August contract at lows as the US dollar remained at highs around 97.5 and shorts loaded up their positions. The contract lost all the gains today as a lack of confidence in the market dragged it from a high of 46,220 yuan/mt, to end at 46,150 yuan/mt. Tight supplies of copper concentrate and import curbs on copper scrap are likely to underpin prices. Tonight, it is expected to test resistance from the 10-day moving average, or the 46,350 yuan/mt level. The SHFE June contract was delivered today at a settlement price of 46,040 yuan/mt. 

Aluminium: The most-active SHFE August contract traded below the daily moving average today after an increase of shorts depressed it to 13,800 yuan/mt right after opening. Pressure from shorts again weighed the contract to 13,765 yuan/mt, the lowest since the end of March. It rebounded and ended at 13,810 yuan/mt, down 0.79% on the day, below all moving averages. A high greenback and weak fundamentals are likely to keep the contract weak tonight. The SHFE June contact was delivered at a settlement price of 13,905 yuan/mt, with a volume of 72,050 mt. 

Zinc: The most-liquid SHFE August contract failed to test pressure from the daily moving average, as it slid to an intraday low of 19,880 yuan/mt and closed 1% lower on the day at 19,900 yuan/mt. Higher inventories of refined zinc, sluggish spot trades, and technical pressure above are likely to depress any upward momentum in the contact tonight. It is expected to face continued pressure from the daily moving average tonight. The settlement price of the SHFE June contract was 20,560 yuan/mt, with a delivered volume of 54,800 mt. 

Nickel: The most-active SHFE August contract retreated after it jumped to a high of 99,680 yuan/mt, losing all the gains today and ending 0.56% lower at 98,850 yuan/mt. The intraday low stood at 98,780 yuan/mt, below the daily moving average. Open interests expanded 6500 lots to 230,000 lots as shorts accumulated. Tonight, it is expected to test support from the 60-day moving average, or the 99,000 yuan/mt level. 

Lead: The most-traded SHFE July contract rebounded from a low of 16,020 yuan/mt in the afternoon as investors covered their shorts and added longs. This bolstered the contract to an intraday high of 16,200 yuan/mt, before it ended 0.31% higher on the day at 16,145 yuan/mt. Pressure from the 40-day moving average remained. We expect it to hover along with the five-day moving average tonight, with support from the 16,000 yuan/mt level. 

Tin: The most-liquid SHFE September contract finished the trading day 0.32% lower at 144,410 yuan/mt, after it rebounded but failed to extend gains at 144,900 yuan/mt. Longs exited and lowered open interests by 336 lots to 41,070 lots today. Tonight, it is estimated to trade with support from 144,000 yuan/mt and resistance from 145,500 yuan/mt.