SMM Evening Comments (Sep 20)

SHANGHAI, Sep 20 (SMM) – SHFE nonferrous metals ended mixed on Friday September 20 with nickel leading the gains and rising 1.53%. Lead climbed 0.12%, aluminium rose 0.46%, copper went flat, while zinc lost 0.58%, and tin fell 0.26%. 

The ferrous complex extended their declines as iron ore decreased 1.85%, rebar fell 1.71%, hot-rolled coil shed 1.79%, and coke went down 2.02%.

Copper: The most-liquid SHFE November contract consolidated around the daily moving average and ended flat at 47,130 yuan/mt, as the market awaited news from the US-China trade talks and tonight’s speech from John Williams, permanent member of the FOMC and President of the New York Fed. Copper prices are likely to remain under pressure from the greenback, after a slew of US central bank decisions came in more hawkish than expected. As the MACD red line continued to shorten, the contract may track its LME counterpart and test support from 47,200 yuan/mt tonight. 

Aluminium: The most-liquid SHFE November contract ended its four straight sessions of decline as shorts booked profits and rallied the contract from a low of 14,650 yuan/mt, to an intraday high of 14,240 yuan/mt, before it ended up 0.46% at 14,225 yuan/mt. Resumption of primary aluminium smelters grew worries about nearby higher supply, and this resulted in the previous pullback in aluminium prices. The contract is expected to hover rangebound next week with the market awaiting environmental policies after the National Day holiday. 

Zinc: The most-liquid SHFE November contract ended lower for the second consecutive trading day even as it moved higher after overnight declines. Loaded-up longs buoyed it to a high of 19,030 yuan/mt, but pressure from the five- and 60- day moving averages settled it down 0.58% at 18,905 yuan/mt. Extended increases in social inventories of refined zinc drove shorts to enter near closing. Tonight, support from the Bollinger middle band should be monitored. 

Nickel: The most-traded SHFE November contract continued its rally as it shrugged off pressure from the five- and 20- day moving averages, closing up 1.53% at 138,370 yuan/mt. Open interest expanded 14,000 lots to 402,000 lots as longs added up their positions. Tonight, the contract may test resistance above from the 10-day moving average. 

Lead: The most-liquid SHFE November contract hovered within a broad range today, with support from 16,800 yuan/mt and an intraday low of 16,785 yuan/mt, ending up 0.12% on the day at 16,870 yuan/mt. There is upside room expected in the contract tonight given an outperformed LME lead and strong support from the 60-day moving average.
 
Tin: The most-traded SHFE January 2020 contract traded rangebound at lows before a buildup in longs lifted it to a high of 137,270 yuan/mt near closing. It still ended 0.26% lower on the day at 136,890 yuan/mt. The contract will trade with support from the 60-day moving average, or 135,500 yuan/mt tonight.