SMM Evening Comments (Jun 21)

Published: Jun 21, 2019 18:42

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SHFE nonferrous metals ended mostly lower

SHANGHAI, Jun 21 (SMM) – SHFE nonferrous metals ended mostly lower on Friday June 21 as zinc fell almost 2%, nickel lost over 1%, lead eased 0.96%, aluminium dipped 0.86%, while copper nudged up, and tin rose 0.24%.

The ferrous complex climbed for the most part as hot-rolled coil jumped over 2%, iron ore increased 1%, rebar went up 1%, coke advanced 1%, while coking coal slid 0.5%.

Copper: The most-traded SHFE August contract failed to hold firm at highs around 46,930 yuan/mt as shorts loaded up their positions amid eased optimism around the US interest rate cut and US-China trade talks. Rising tensions in the Middle East also grew concerns in the market and depressed momentum in copper prices. The contract dipped to an intraday low of 46,720 yuan/mt and finished at 46,850 yuan/mt, up 0.02% on the day. Open interests accumulated 838 lots to 246,000 lots. As the MACD red line lengthened and support from the Bollinger middle band remained, the contract is expected to test support from 46,700 yuan/mt tonight.

Aluminium: The most-active SHFE August contract lost gains from the previous three days as expanding shorts drove it below the daily moving average, to 13,745 yuan/mt, the lowest since the end of March. It fell 0.86% on the day and ended at 13,765 yuan/mt, with open interests up 9,476 lots. As the focus of the market moved back to fundamentals, falling prices of alumina are likely to keep the contract weak, below the 14,000 yuan/mt level tonight.

Zinc: The most-traded SHFE August contract fell to the lowest in a month, at 19,410 yuan/mt, as expanding social inventories grew pessimism in the market. It finished the trading day 1.94% lower at 19,450 yuan/mt, with short aggressively adding their positions, raising open interests in the contract by 35,088 lots to 333,000 lots. With the KDJ indicators showing limited signs of stopping the decline, the contract is expected to trade weakly around the Bollinger lower band tonight.

Nickel: The most-liquid SHFE August contract traded weakly today as departing longs dragged it below the five-day moving average, to 98,310 yuan/mt at closing, after it hovered around 98,300 yuan/mt in the afternoon. Open interests lost 8,000 lots to 243,000 lots. Tonight, the contract is expected to test support from the 10-day moving average, or the 98,000 yuan/mt level.

Lead: The most-liquid SHFE August contract rebounded after shorts lowered it to 16,015 yuan/mt in early trades, but a broad SHFE price decline in the afternoon dragged it sharply to a low of 15,945 yuan/mt, ending it at 15,965 yuan/mt, down 0.96% on the day. The contract fell below support from the Bollinger middle band today. With considerate pressure above, it may struggle to rebound back to 16,000 yuan/mt tonight.

Tin: The most-traded SHFE September contract retreated after jumped to an intraday high of 144,650 yuan/mt, but still ended 0.24% higher on the day at 144,300 yuan/mt. The five-day moving average provided support. Tonight, the contract is seen trading with resistance from 145,000 yuan/mt, and support from 143,500 yuan/mt.

Evening comments Futures movement

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