SMM Evening Comments (Sep 18)

SHANGHAI, Sep 18 (SMM) – SHFE nonferrous metals, except for nickel, closed lower on Wednesday September 18. Copper shed 0.15%, aluminium fell 0.25%, lead slid 0.56%, zinc dipped 0.16%, tin fell 0.3%, while nickel gained 0.02%. 

The ferrous complex extended their declines as iron ore lost 0.68%, rebar fell 1.33%, hot-rolled coil eased 0.9%, and coke went down 0.08%.

Copper: The most-active SHFE November contract stemmed declines from the previous two sessions as the market awaited decisions on the interest rate cut by the US Federal Reserve. The contract climbed from a low of 47,260 yuan/mt in the afternoon, to hit an intraday high of 47,430 yuan/mt, but still ended down 0.15% on the day at 47,310 yuan/mt. With pressure above from the five-day moving average and bearish signals from the KDJ indicators, the contract may track its LME counterpart and test support from 47,400 yuan/mt tonight. 

Aluminium: Departing longs weighed on the most-liquid SHFE November contract, which ended down 0.25% at 14,215 yuan/mt, the third consecutive trading day of declines. Open interest decreased 3,210 lots to 258,000 lots. The backwardation structure is expected to continue in the short term. Pressure from the 20-day moving average will keep the contract between 14,200-14,300 yuan/mt tonight. 

Zinc: The most-active SHFE November contract traded rangebound and closed 0.16% lower on the day at 19,125 yuan/mt, as a weaker LME zinc dragged it from a high of 19,170 yuan/mt. Support from the 19,000 yuan/mt level remained firm. The SHFE October and November contracts flipped to backwardation structure today. Resistance from the five-day moving average should be monitored tonight. 

Nickel: Loaded-up longs buoyed the most-liquid SHFE November contract, to highs around 137,200 yuan/mt, and settled it 0.02% higher on the day at 136,520 yuan/mt, after two straight days of decline. With support from the 20-day moving average, the contract is likely to test support from 136,000 yuan/mt tonight. 

Lead: The most-traded SHFE November contract stopped declines from the previous session, on news that Taihe county of Anhui province intensified environmental restrictions. The contract moved higher to the 16,920 yuan/mt level but still closed 0.56% lower on the day, at 16,870 yuan/mt. Short-term moving averages expanded downwards and LME lead weakened, suggesting limited upside room in the November contract tonight. But strong support is seen from the 60-day moving average. 

Tin: The most-active SHFE January 2020 contract climbed to an intraday high of 137,900 yuan/mt as shorts exited, ending down 0.3% on the day at 137,280 yuan/mt. Open interest shrank 738 lots to 36,382 lots. Tonight, the contract will face resistance from 139,500 yuan/mt, with support from 135,800 yuan/mt.