SMM Evening Comments (Aug 6)

SHANGHAI, Aug 6 (SMM) – SHFE nonferrous metals ended higher across the board on a lower yuan. Nickel continued to lead the gains as it closed 2.21% higher. Lead rose 1.93%, tin climbed 0.42%, copper advanced 0.44%, zinc increased 0.29%, and aluminum grew 0.29%. 

The ferrous complex traded lower as iron ore settled down 2%, with rebar and hot-rolled coil dipping 1.88% and 1.14%, respectively. 

Copper: The most-liquid SHFE September contract stemmed the decline from overnight with support from a weaker yuan. The contract regained losses from early trades as it rallied from a low of 45,970 yuan/mt, and climbed to an intraday high of 46,240 yuan/mt, before ending up 0.44% on the day at 46,150 yuan/mt. A lack of strong technical support is expected to keep the contract struggling above 46,100 yuan/mt tonight. 

Aluminium: The most-active SHFE September contract traded rangebound with a high of 13,910 yuan/mt as the market again looked at fundamentals. It pared some gains and closed the trading day 0.29% higher at 13,865 yuan/mt, with open interests up 2,608 lots to 216,460 lots. Trading range is expected at 13,700-13,900 yuan/mt tonight. 

Zinc: Short-covering buoyed the most-liquid SHFE September contract around noon, to a high of 19,280 yuan/mt, after the contract traded rangebound around 19,170 in the morning. With pressure from the 20-day moving average, it settled 0.29% higher on the day at 19,265 yuan/mt. However, as bearish sentiment over macroeconomic development outweighs fundamental support, the contract may face weakened upward momentum tonight. It is expected to trade around the 20-day moving average tonight. 

Nickel: The most-active SHFE October contract hovered within a broad range today as it came off from a high of 119,160 yuan/mt but found support from the 117,600 yuan/mt level, settling up 2.21% on the day at 118,600 yuan/mt. Open interests climbed 7,400 lots to 446,000 lots. Tonight, it may continue to consolidate at highs of 118,000-120,000 yuan/mt. 

Lead: The most-traded SHFE September contract regained much of the recent losses as loaded-up longs pulled it to a high of 16,600 yuan/mt, just before it ended at 16,595 yuan/mt, up 1.93% on the day. With support from the 40-day moving average and a higher LME lead, the September contract is expected to hover at highs tonight. 

Tin: The most-liquid SHFE September contract regained losses from the previous session as departing shorts drove it to a high of 134,600 yuan/mt, and settled it 0.42% higher on the day at 134,530 yuan/mt. Open interests lost 1,378 lots to 20,080 lots. Support below is seen from 132,000 yuan/mt in the short term.