SMM Evening Comments (Aug 14)

Published: Aug 14, 2019 17:24 (GMT+8)
SHFE nonferrous metals traded mixed with nickel climbing 0.6%

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. 

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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SMM Evening Comments (Aug 14) - Shanghai Metals Market (SMM)