SMM Evening Comments (Aug 16)

SHANGHAI, Aug 16 (SMM) – SHFE nonferrous metals closed mostly higher with nickel as the best performer, rising 2.3% on the day. Lead grew 0.8%, copper rose 0.3%, zinc gained 0.2%, while aluminium lost 0.4%, and tin fell 0.6%. 

The ferrous complex settled higher as coking coal climbed 1%, rebar rose 0.4%, hot-rolled coil increased 0.5%, iron ore and coke advanced 0.1%. 

Copper: The most-liquid SHFE October contract edged higher amid loaded-up longs as prices had already slipped to relative lows. It finished at 46,550 yuan/mt, up 0.28% on the day, with open interest growing 424 lots. However, fears over the US-China trade war and the global demand slowdown will continue to weigh on near-term prices. Pressure above from several moving averages is likely to see the contract struggling above the 46,500 yuan/mt level tonight. 

Zinc: Rising longs and departing shorts lifted the most-active SHFE October contract from an intraday low of 18,560 yuan/mt, but pressure from the 10-day moving average prevented it from exceeding 18,725 yuan/mt. The contract ended up 0.16% on the day at 18,640 yuan/mt. Investors remained cautious about lower inventories of refined zinc this week. Resistance from moving averages above will weaken any upward momentum in prices tonight. Pressure from the 10-day moving average should be monitored tonight. 

Nickel: The most-liquid SHFE October contract held onto gains from overnight as it closed 2.31% higher on the day at 126,010 yuan/mt, with open interest surging 29,700 lots to 477,400 lots. Support from longs may keep the contract at highs in the short term. Tonight, pressure from a previous high of 128,000 yuan/mt and from the Bollinger upper band should be monitored.

Lead: The most-active SHFE September contract traded above the daily moving average today but with sluggish upward momentum, as pressure remained at the 16,800 yuan/mt level. It ended the trading day 0.78% higher at 16,720 yuan/mt. As its LME counterpart moved downwards, the contract may face limited upside room tonight. 

Tin: A lack of upward momentum extended losses in the most-active SHFE September contract, which finished the trading day 0.56% lower at 133,010 yuan/mt. It is expected to trade with support below from 132,000 yuan/mt, and resistance from the 20-day moving average, or 134,500 yuan/mt.