SMM Evening Comments (Oct 18)

SHANGHAI, Oct 18 (SMM) – SHFE nonferrous metals closed mostly higher on Friday October 18, as aluminium climbed 0.11%, lead rose 0.03%, zinc increased 0.16%, tin advanced 0.91%, while copper shed 0.13%, and nickel lost 0.61%. 

The ferrous composite ended mixed. Iron ore grew 0.74%, rebar rose 0.18%, hot-rolled coil added 0.09%, while stainless steel fell 1.67%, and coke eased 0.22%. 

Copper: Bleak third-quarter economic data in China depressed demand outlook for industrial metal and kept copper prices lower today. The most-active SHFE December contract hovered below the daily moving average after overnight fall, ending 0.13% lower on the day at 46,570 yuan/mt. With strong resistance above, the contract is expected to test the 46,500 yuan/mt level tonight. 

Zinc: Bearish positions departed and buoyed the most-active SHFE December contract to a high of 18,890 yuan/mt, before the contract closed up 0.16% on the day at 18,860 yuan/mt, trimming losses from the previous two sessions. Contango structure intensified as capitals flew into far month contracts. Limited confidence among longs may see the December contract testing pressure from the Bollinger middle band tonight. 

Nickel: The most-traded SHFE December contract stemmed decline today as exiting shorts lifted the contract from a low of 128,150 yuan/mt, to above the 130,000 yuan/mt level. It still ended 0.61% lower on the day at 129,300 yuan/mt, with open interest down 9,000 lots to 362,000 lots. Support below from the 60-day moving average, and 128,500 yuan/mt, will be monitored tonight. 

Lead: The most-liquid SHFE December contract pared gains from the previous two sessions as deepened discounts of secondary refined lead drove the contract down to an intraday low of 17,025 yuan/mt, before it ended 0.03% higher on the day at 17,055 yuan/mt. An outperformed LME lead may keep the contract around 17,000 yuan/mt tonight. 

Tin: The most-traded SHFE January 2020 contract consolidated below the daily moving average and the 140,500 yuan/mt level today, ending higher for the third straight session by 0.91% on the day at 140,530 yuan/mt. Top refined tin producer Yunnan Tin said it would halt production for maintenance, and this supported tin prices. Resistance above is expected from 142,000 yuan/mt tonight.