SMM Evening Comments (Jun 28)

SHANGHAI, Jun 28 (SMM) – SHFE nonferrous metals, except for nickel, closed lower on Friday as investors watched for developments from the G-20 summit in Japan, where US President Donald Trump and Chinese President Xi Jinping are expected to meet amid the ongoing trade standoff.

Zinc saw the biggest loss of 1.1%, lead shed 0.7%, aluminium fell 0.5%, tin slipped close to 0.3%, and copper lost 0.2%.

The ferrous complex, except for coke, ticked up. Iron ore advanced 2.1%, rebar and coking coal gained 0.7% and hot-rolled coil climbed 0.3%.

Copper: The most active SHFE August contract reversed earlier gains to close the trading day 0.19% lower at 47,010 yuan/mt. It could find little support from the technical side, with resistance from the five- and 40-day moving averages and the KDJ lines shaping a bearish cross. The contract is expected to try to stand firmly above the 47,000 yuan/mt level tonight.

Aluminium: The most traded SHFE August contract extended overnight declines to an intraday low of 13,780 yuan/mt before it recovered some ground to finish the trading day 0.5% lower at 13,830 yuan/mt. It is expected to continue to hover below the 14,000 yuan/mt level tonight.

Zinc: As shorts added and longs trimmed their positions, the most active SHFE August contract dropped in morning trade before it ended the trading day 1.08% lower at 19,775 yuan/mt. Macro uncertainty drove longs to cover their positions, accounting for the losses on the day. While SMM data showed that social inventories of refined zinc across Shanghai, Tianjin and Guangdong dipped this week, expectations of higher inventories will continue to weigh on SHFE zinc, which is expected to trade under pressure from the 20-day moving average tonight.

Nickel: The most traded SHFE August contract weakened during the day, erasing much of overnight gains to close 0.4% higher at 101,490 yuan/mt. Its spread with the 1907 contract flipped into contango structure, which lowered the risks of a short squeeze for the 1907 contract. Resistance from the upper Bollinger band is under scrutiny tonight.

Lead: As shorts added their positions, the most active SHFE August contract extended overnight losses to a low of 15,985 yuan/mt before it closed the trading day 0.71% lower at 16,020 yuan/mt. It has fallen below the lower Bollinger band after three consecutive days of declines. As its LME counterpart weakened during European trading hours, SHFE lead is unlikely to remain above the 16,000 yuan/mt level tonight.

Tin: A load-up of short positions knocked the most traded SHFE September contract to a low of 143,060 yuan/mt in afternoon trade before the contract ended 0.26% lower at 143,110 yuan/mt, Support is seen at 143,000 yuan/mt.