SMM Evening Comments (Aug 14)

SHANGHAI, Aug 14 (SMM) – SHFE nonferrous metals traded mixed with nickel climbing 0.6%. Tin grew 0.3%, zinc rose 0.2%, while copper and aluminium eased 0.1%, and lead shed 0.2%.

The ferrous complex also saw mixed trades as iron ore continued to rise 0.7%, hot-rolled coil gained 0.5%, while coke slid 1.6%, coking coal lost 1.2%, and rebar fell 0.1%. 

Copper: Renewed concerns about trade uncertainties depressed copper prices, after prices rallied overnight as the US delayed imposing some tariffs on Chinese imports. The most-active SHFE October contract gave up overnight gains and closed 0.06% lower on the day at 46,580 yuan/mt. With limited upward momentum and bearish signals from the MACD indicators, the contract may track its LME counterpart and test support from 46,600 yuan/mt tonight.

Aluminium: The most-active SHFE October contract continued to hover at highs, driven by loaded-up longs and departing shorts. It climbed to an intraday high of 14,205 yuan/mt and finished at 14,175 yuan/mt, down 0.1% on the day, with open interest shrinking 4,162 lots to 303,970 lots. A bullish outlook for the medium to long term may keep prices at highs tonight. 

Zinc: The most-liquid SHFE October contract closed higher for the third consecutive trading day even as it pared some overnight gains on eased macroeconomic bullishness. It settled at 18,730 yuan/mt, up 0.21% on the day, with open interest down 1,084 lots as longs exited. Downstream demand remained weak, as evidenced by falling spot premiums. This, together with expectations of a better-supplied market, will keep prices under pressure. The contract is likely to test resistance from the 10-day moving average tonight. 

Nickel: The most-liquid SHFE October contract extended a rangebound trend in early trades but a buildup in longs lifted the contract above the 124,000 yuan/mt level, to a high of 124,600 yuan/mt, before it ended 0.64% higher on the day at 124,210 yuan/mt. Tonight, it is likely to test support from the five-day moving average or 124,000 yuan/mt. 

Lead: Loaded-up longs buoyed the most-active SHFE September contract but pressure from the five-day moving average prevented it from exceeding 16,760 yuan/mt. It finished the trading day 0.18% lower at 16,715 yuan/mt, with open interest up 448 lots to 45,638 lots. Anticipations of a significant rise in lead supply this month kept prices below the 17,000 yuan/mt level, but support remained from 16,500 yuan/mt. As LME lead also weakened, the contract faces further downward pressure tonight. 

Tin: Upbeat market sentiment supported the most-liquid SHFE September contract, which extended the rises from last night and climbed to a high of 134,580 yuan/mt around noon. It settled 0.31% higher on the day at 134,460 yuan/mt. Support below is seen from 132,000 yuan/mt, with resistance from 134,500 yuan/mt tonight.