SMM Evening Comments (Sep 19)

SHANGHAI, Sep 19 (SMM) – SHFE nonferrous metals ended mixed on Thursday September 19 with nickel the best performer, rising 0.59% on the day. Lead grew 0.45%, tin advanced 0.19%, while copper eased 0.38%, aluminium fell 0.81%, and zinc lost 0.97%. 

The ferrous complex extended their declines as iron ore tumbled 4.64%, rebar fell 3.3%, hot-rolled coil shed 2.83%, and coke went down 1.13%.

Copper: The most-liquid SHFE November contract pulled back from a slight rebound in the previous session, weighed by concerns about global growth. Prices also faced pressure from a firm US dollar, given a more hawkish than forecast tone from Wednesday’s Federal Reserve meeting. The contract relinquished gains from the daytime and ended down 0.38% at 47,070 yuan/mt. As the MACD red line shortened and the KDJ indicators expanded downwards, which suggested little technical support, the contract may struggle to hold above 47,000 yuan/mt tonight. 

Aluminium: As longs continued to cover their positions, the most-active SHFE November contract extended losses from the previous three sessions, ending down 0.81% on the day at 14,135 yuan/mt. Social inventories of primary aluminium in China fell for the fourth straight week as of Thursday, suggesting decent downstream consumption. Tonight, the contract may hover rangebound between 14,100-14,300 yuan/mt. 

Zinc: The most-traded SHFE November contract climbed in the afternoon session but pressure from the 10-day moving average and a weakened LME zinc stopped its increases at 19,090 yuan/mt, before it closed 0.97% lower at 18,950 yuan/mt. Pressure above from the 10-day moving average should continue to be monitored tonight. 

Nickel: The most-liquid SHFE November contract extended a slow rally from the previous session as it closed up 0.59% at 136,420 yuan/mt. Loaded-up longs prevented the prices from dipping further below 135,440 yuan/mt. The contract held above the 20-day moving average but strong resistance was seen from 137,000 yuan/mt. Tonight, it may trade between 135,600-137,000 yuan/mt. 

Lead: The most-traded SHFE November contract rebounded from a low of 16,750 yuan/mt, but limited upward momentum only sent it up 0.45% to finish at 16,855 yuan/mt. On-warrant lead stocks across SHFE-listed warehouses shrank nearly 5,300 mt during the latest two sessions, indicating high purchasing enthusiasm on lower prices. This, coupled with a rebounded LME lead, may boost confidence in longs and see the contract testing resistance from 17,000 yuan/mt tonight. 

Tin: The most-liquid SHFE January 2020 contract traded in a tight range today, with a high of 137,600 yuan/mt, ending up 0.19% at 137,360 yuan/mt. A weaker LME tin is likely to see it testing support from the 60-day moving average, or 135,800 yuan/mt tonight.