SMM Evening Comments (Sep 24)

SHANGHAI, Sep 24 (SMM) – SHFE nonferrous metals, except for copper, ended lower on Tuesday September 24. Aluminium lost 0.39%, lead fell 0.77%, zinc slid 0.32%, tin shed 0.82%, and nickel dipped 0.2%. 

The ferrous complex traded mixed as iron ore decreased 2.43%, coke slipped 3.9%, while rebar went up 0.67%, and hot-rolled coil grew 1.21%. 

Copper: The most-liquid SHFE November contract pared daytime gains and ended up 0.19% at 47,120 yuan/mt, as weak manufacturing data from Europe reinforced worries about slower global growth. A strong US dollar around 98.7 also capped the increase in copper prices. As the MACD green line continued to lengthen, indicating poor technical support, the contract may track its LME counterpart and test support from 47,100 yuan/mt tonight. 

Zinc: The most-traded SHFE November contract followed its LME counterpart lower and hit an intraday low of 18,755 yuan/mt, before it unsuccessfully tested pressure above and ended lower for the fourth straight day, by 0.32% at 18,800 yuan/mt. While bearish macroeconomic sentiment depressed base metals, the contract remained above support from the 40-day moving average, underpinned by tight spot supply. Tonight, pressure from the 10-day moving average will be watched. 

Nickel: The most-liquid SHFE November contract rebounded after loaded-up shorts dragged it to an intraday low of 136,140 yuan/mt. It finished the trading day 0.2% lower at 138,590 yuan/mt, with open interest down 31,000 lots to 368,000 lots as shorts booked profits and left. Tonight, pressure above from the 10-day moving average or 139,000 yuan/mt should be monitored. 

Lead: Market confidence faltered on looser-than-expected environmental curbs ahead of National Day holiday, and this drove the most-liquid SHFE November contract down by 0.77% to 16,750 yuan/mt. Strong support remained from the 60-day moving average. With pressure from the 40-day moving average and a weaker LME lead, the contract may trade rangebound between the 40- and 60- day moving averages tonight. 

Tin: The most-traded SHFE January 2020 contract hovered below the daily moving average, or 137,200 yuan/mt today, ending down 0.82% at 136,550 yuan/mt. Support below is seen from 136,000 yuan/mt tonight.