SMM Evening Comments (Jun 24)

SHANGHAI, Jun 24 (SMM) – SHFE nonferrous metals, except for lead, closed lower on Monday, with the biggest loss of 0.7% in tin. Nickel fell 0.5%, zinc slipped 0.4%, copper shed 0.3% and aluminium dipped 0.04%.

The ferrous complex traded mixed after China’s top steelmaking city of Tangshan deepened production curbs. Hot-rolled coil surged 3.7%, rebar jumped 2.3%, coke gained 0.4%, while coking coal lost close to 1%, and iron ore slid 1.1%.

Copper: The most active SHFE August contract reversed earlier gains to end the trading day 0.3% lower at 46,750 yuan/mt. Investor concerns ahead of the G-20 meeting and US-Iran tension eroded steam in copper prices. The contract is expected to try to remain above the 46,700 yuan/mt level tonight.

Aluminium: The most traded SHFE August contract climbed during the day, recovering from Friday night losses to close the trading day slightly lower at 13,830 yuan/mt. Despite falling inventories, SHFE aluminium is unlikely to strongly break the 14,000 yuan/mt level tonight, in the absence of positive news on the consumption or cost front.

Zinc: As shorts covered their positions, the most liquid SHFE August contract rose during the day, recovering from Friday night losses to close the trading day 0.38% lower at 19,585 yuan/mt. SHFE zinc remained below all short-term moving averages, and MACD lines shaped a death cross, suggesting limited upward momentum in the metal. While SMM data showed that social inventories of refined zinc across Shanghai, Tianjin and Guangdong dipped over the weekend, greater production across smelters and the absence of improvement in consumption will continue to weigh on SHFE zinc. The contract is expected to trade under pressure from the lower Bollinger band tonight.

Nickel: The most active SHFE August contract hovered around the 98,000 yuan/mt level during the day, and ended 0.53% lower at 98,670 yuan/mt. SHFE nickel breached the five-day moving average, and is expected to try to hold onto the 98,000 yuan/mt level tonight, with support from the 20-day moving average.

Lead: The most traded SHFE August contract rebounded following the news that some smelters were impacted by the pollution control in Henan. This helped the contract to pare an earlier loss and finish the trading day 0.72% higher at 16,160 yuan/mt. SHFE lead is expected to test pressure at 16,250 yuan/mt tonight, with support from the 20-day moving average. Resistance is seen strongly at the 60-day moving average.

Tin: As shorts added their positions, the most active SHFE September contract extended Friday night losses to end the trading day 0.71% lower at 143,380 yuan/mt. Support is seen at 143,000 yuan/mt, while resistance is at the 10-day moving average as high as 144,500 yuan/mt.