Metals News
SMM Evening Comments (Nov 13)
price review forecast
Nov 13,2019

SHANGHAI, Nov 13 (SMM) – SHFE nonferrous metals closed lower across the broad on Wednesday, as US-China trade concerns resurfaced after US President Trump threatened to “substantially” raise tariffs if the first step of a broader trade agreement isn’t reached.

Tin led the losses with a 1.4% decline, zinc and nickel dropped 0.8%, aluminium shed 0.5%, copper fell 0.4%, and lead slipped close to 0.3%.

Risk aversion sentiment, meanwhile, sent US gold futures back above $1,460/oz, while crude prices slipped to the $56/barrel level on demand concerns.

The ferrous complex, however, rose broadly after Beijing earlier this week unveiled winter production control plans for major manufacturing hubs.

Iron ore climbed 1.1%, rebar rose 1%, hot-rolled coil advanced 0.9%, stainless steel gained 0.5%, coke edged up 0.1%, while coking coal recovered from early losses to close flat.

Copper: The most active SHFE 2001 contract slipped to its lowest in more than a week at 46,970 yuan/mt in morning trade, before it recouped some losses to end down 0.38% at 47,030 yuan/mt. Dampened US-China trade deal hopes kept copper prices in check, with technical indicators in a bearish bias. Whether SHFE copper could remain above 47,000 yuan/mt will come under scrutiny tonight.

Aluminium: The SHFE 1912 contract hovered in a tight range during the daytime session to end down 0.47% at 13,805 yuan/mt, residing around the lowest in nearly two weeks. SHFE aluminium is unlikely to substantially recover ahead of the delivery. SMM will release its weekly social inventory data on Thursday, which will provide some cues on how fast consumption is slowing down.

Zinc: The most active SHFE 2001 contract slipped to a 10-week low of 18,465 yuan/mt in morning trade, before it recovered some ground to close 0.8% lower at 18,540 yuan/mt. Growing supply subdued SHFE zinc, but firm spot premiums offered some support. SHFE zinc is likely to test the lower Bollinger band tonight, with support seen at 18,500 yuan/mt.

Nickel: As shorts loaded up their positions, the most traded SHFE 2002 contract tumbled below the lower Bollinger band to a three-month low of 120,300 yuan/mt in the final trading hour, before it recouped some losses to end down 0.78% at 121,080 yuan/mt. Whether the lower Bollinger band could help SHFE nickel hold above 120,000 yuan/mt will come under scrutiny tonight.

Lead: After hovering around 15,930 yuan/mt earlier in the session, the most active SHFE 1912 contract slipped on panic-selling in the final trading hour and ended down 0.25% at 15,875 yuan/mt. SHFE lead is likely to continue its downtrend to new lows tonight, in line with its weakening LME counterpart.

Tin: The buildup of short positions knocked the most traded SHFE 2001 contract below the 60-day moving average to a five-week low of 134,240 yuan/mt in the morning, and the contract later clawed back some losses to finish the trading day 1.41% lower at 134,600 yuan/mt. Whether SHFE tin could hold above 133,500-134,000 yuan/mt will come under scrutiny in the short term, with the possibility of a technical recovery to 136,000 yuan/mt.

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