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SMM Evening Comments (Jul 25)

iconJul 25, 2019 17:04
SHFE nonferrous metals traded mixed with tin as the best performer

SHANGHAI, Jul 25 (SMM) – SHFE nonferrous metals traded mixed with tin as the best performer and adding 1.41%. Lead grew 1.06%, aluminium rose 0.83%, copper advanced 0.06%, while nickel slid 1.71%, and zinc eased 0.05%. 

The ferrous complex ended higher as iron ore rallied 1.16%, rebar expanded 1%, and hot-rolled coil went up 0.99%. 

Copper: The most-liquid SHFE September contract nearly lost all gains from last week with continued pressure from a high US dollar. It slipped to a low of 46,970 yuan/mt after opened at an intraday high of 47,110 yuan/mt, but ended up 0.06% on the day at 47,020 yuan/mt. Exiting longs lowered open interests in the contract by 4,564 lots to 246,000 lots. Bearish signals from technical indicators and limited support from fundamentals will keep the contract testing support from 47,000 yuan/mt tonight. 

Aluminium: An unexpected decline in social inventories of primary aluminium eased worries about domestic slow consumption, and pushed up the most-liquid SHFE September contract to a high of 13,895 yuan/mt, before it settled at 13,890 yuan/mt, up 0.83% on the day. Open interests accumulated 9,300 lots to 244,892 lots as longs grew. The contract has shrugged off pressure from the five-, 10-, and 40- day moving averages. Confidence in longs will continue to support prices tonight. 

Zinc: The most-active SHFE September contract traded within a tight range, with pressure from the Bollinger middle band, and finished the trading day 0.05% lower at 19,270 yuan/mt. Open interests climbed 6,288 lots, while that across October and November contracts saw a combined increase of 20,000 lots, with shorts taking up the most, indicating bearish sentiment in the market. Tonight, pressure from the Bollinger middle band will be monitored. 

Nickel: The most-liquid SHFE October contract failed to hold firm above the key support levels, and slid to lows around 110,000 yuan/mt, ending down 1.71% on the day at 110,040 yuan/mt. Aggressive loaded-up shorts accounted for the declines, while longs did not cover their positions much. With resistance from the five-day moving average, the contract may continue to trade rangebound tonight. 

Lead: The most-active SHFE September contract tracked a rally in LME lead and climbed 1.06% on the day to close at 16,695 yuan/mt. Open interests lost 2,146 lots to 65,446 lots as shorts covered their positions. Growth in the contract slowed from the previous session, but strong support from the five-day moving average remained. A robust LME lead will narrow any downside room in the contract tonight. 

Tin: The most-traded SHFE September contract rose swiftly to an intraday high of 136,220 yuan/mt, right after it opened at 135,160 yuan/mt, amid departing shorts. It pared some gains and closed at 134,800 yuan/mt, up 1.41% on the day. Open interests shrank some 600 lots. Tonight, the contract is expected to trade with support from 134,000 yuan/mt and resistance from 136,000 yuan/mt. 

Evening comments
Futures movement

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