SMM Evening Comments (Nov 11)

SHANGHAI, Nov 11 (SMM) – SHFE nonferrous metals, except for tin, closed lower on Monday, amid a dampening of optimism over US-China trade, after US President Donald Trump denied that he had agreed to roll back tariffs on Chinese goods.

Nickel led the losses with a 1.7% decline. Aluminium dropped 1%, lead and zinc fell 0.7%, and copper shed 0.5%.

The ferrous complex also weakened broadly. Stainless steel plunged 4.3%, coke tumbled 2.9%, iron ore dropped 2.4%, rebar slipped 1.1%, hot-rolled coil declined 1% and coking coal lost 0.9%.

Copper: The most active SHFE 1912 contract held in a tight range around 47,100 yuan/mt during the daytime session, failing to recover from Friday night losses and ending down 0.53% at 47,110 yuan/mt, on renewed US-China trade uncertainty and fading expectations of deeper production cuts by the OPEC. Downside in copper prices, meanwhile, was limited by the recent release of generally upbeat economic data from major economies. SHFE copper is expected to try to return above 47,200 yuan/mt tonight, with support at the 40-day moving average and the middle Bollinger band.

Aluminium: The most traded SHFE 1912 contract dropped 1% on the day to end at a one-week low of 13,895 yuan/mt, near the 60-day moving average, as dampened US-China trade hopes and a smaller decline in social inventories in China prompted long investors to exit. The possibility that aluminium fundamentals will worsen as early as previously estimated weakened, as smelters further put off their resumption. SHFE aluminium is likely to test support at the 20-day moving average tonight.

Zinc: The most active SHFE 2001 contract eased to a two-month low of 18,510 yuan/mt in afternoon trade, before it recovered some ground to close down 0.67% at 18,575 yuan/mt. Open interest for the contract expanded over 20,000 lots on the day, with short positions accounting for the lion’s share as expectations of a sustained rebound in social inventories amid rising production kept investors pessimistic. Support at the lower Bollinger band will come under scrutiny tonight.

Nickel: The SHFE 2002 contract slipped to the 124,200 yuan/mt level in early morning trade, and hovered in a tight range to finish the trading day 1.67% lower at 124,470 yuan/mt, keeping further away from moving averages. Support is seen at a previous low of 123,000 yuan/mt.

Lead: The most active SHFE 1912 contract dropped in the final trading hour, erasing earlier gains below the 16,000 yuan/mt handle to end down 0.72% at 15,965 yuan/mt, as bullish investors trimmed their positions on risk aversion. Long positions shrank over 10,000 lots, with technical indicators in a bearish bias and fundamentals remaining weak. SHFE lead is expected to hover around 16,000 yuan/mt tonight.

Tin: The most traded SHFE 2001 contract jumped to a one-week high of 138,130 yuan/mt in morning trade, before it eased to close 0.18% firmer at 137,450 yuan/mt. Resistance is seen at the 20-day moving average at 138,000 yuan/mt.