SMM Evening Comments (Nov 20)-Shanghai Metals Market

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SMM Evening Comments (Nov 20)

Price Review & Forecast 07:06:04PM Nov 20, 2019 Source:SMM

SHANGHAI, Nov 20 (SMM) – SHFE nonferrous metals mostly rose on Wednesday as market sentiment improved after China’s central bank step up credit support to prop up the economy.

The one-year loan prime rate (LPR) was lowered by five basis points to 4.15% and the five-year LPR was lowered by the same margin to 4.8%.

Zinc led the gains and closed up 0.44%. Copper advanced 0.41%, aluminium grew 0.22%, tin rose 0.27%, while lead slipped 0.25%, and nickel plunged 2.22%.

The ferrous complex extended their increases as iron ore added 0.16%, rebar climbed 2.4%, hot-rolled coil rose 1.23%, stainless steel grew 0.24%, and coke went up 1.68%. 

Copper: The most-active SHFE 2001 contract consolidated above 47,000 yuan/mt, ending the session at more than a week high of 47,050 yuan/mt, supported by China’s move to trim new benchmark lending rate to shore up its economy. Bullish signals from technical indicators may see the contract testing support from 47,000 yuan/mt tonight. 

Aluminium: The most-active SHFE 2001 contract reversed decline from the prior session with a rise of 0.22%, ending at 13,780 yuan/mt as investors cut their short position. The SHFE December contract registered a bigger increase, widening its price gap between the SHFE 2001 contract to 100 yuan/mt. Stable demand in the spot market and continued fall in alumina costs will likely keep the 2001 contract rangebound tonight. 

Zinc: Short-covering lifted the most-active SHFE 2001 contract, which climbed to a high of 18,400 yuan/mt and closed up 0.44% at 18,340 yuan/mt. Confidence in shorts weakened as spot zinc premiums stay at highs. But morale among long position was also low, which may see the contract testing pressure from the Bollinger lower band tonight. 

Nickel: The most-traded SHFE 2002 contract continued to trend downwards with bearish position building up, ending lower for the fourth straight day by 2.22% at 113,500 yuan/mt. It diverged from all moving averages above and may test support from 113,000 yuan/mt tonight. 

Lead: With heavy pressure from the five-day moving average, the most-liquid SHFE 2001 contract hovered around the daily moving average and finished 0.25% lower at 15,655 yuan/mt. The decline was capped as suppliers of secondary lead firmed up offers. However, the upward momentum in the contract will also be limited given slower operation at downstream battery mills and a broad economic slowdown. The contract is expected to trade with pressure from 16,000 yuan/mt tonight. 

Tin: The most-active SHFE January 2020 contract moved steadily around 135,000 yuan/mt, with an intraday high of 135,170 yuan/mt, ending up 0.27% at 135,000 yuan/mt. Pressure above is expected at 135,700 yuan/mt tonight. 

SMM Evening Comments (Nov 20)

Price Review & Forecast 07:06:04PM Nov 20, 2019 Source:SMM

SHANGHAI, Nov 20 (SMM) – SHFE nonferrous metals mostly rose on Wednesday as market sentiment improved after China’s central bank step up credit support to prop up the economy.

The one-year loan prime rate (LPR) was lowered by five basis points to 4.15% and the five-year LPR was lowered by the same margin to 4.8%.

Zinc led the gains and closed up 0.44%. Copper advanced 0.41%, aluminium grew 0.22%, tin rose 0.27%, while lead slipped 0.25%, and nickel plunged 2.22%.

The ferrous complex extended their increases as iron ore added 0.16%, rebar climbed 2.4%, hot-rolled coil rose 1.23%, stainless steel grew 0.24%, and coke went up 1.68%. 

Copper: The most-active SHFE 2001 contract consolidated above 47,000 yuan/mt, ending the session at more than a week high of 47,050 yuan/mt, supported by China’s move to trim new benchmark lending rate to shore up its economy. Bullish signals from technical indicators may see the contract testing support from 47,000 yuan/mt tonight. 

Aluminium: The most-active SHFE 2001 contract reversed decline from the prior session with a rise of 0.22%, ending at 13,780 yuan/mt as investors cut their short position. The SHFE December contract registered a bigger increase, widening its price gap between the SHFE 2001 contract to 100 yuan/mt. Stable demand in the spot market and continued fall in alumina costs will likely keep the 2001 contract rangebound tonight. 

Zinc: Short-covering lifted the most-active SHFE 2001 contract, which climbed to a high of 18,400 yuan/mt and closed up 0.44% at 18,340 yuan/mt. Confidence in shorts weakened as spot zinc premiums stay at highs. But morale among long position was also low, which may see the contract testing pressure from the Bollinger lower band tonight. 

Nickel: The most-traded SHFE 2002 contract continued to trend downwards with bearish position building up, ending lower for the fourth straight day by 2.22% at 113,500 yuan/mt. It diverged from all moving averages above and may test support from 113,000 yuan/mt tonight. 

Lead: With heavy pressure from the five-day moving average, the most-liquid SHFE 2001 contract hovered around the daily moving average and finished 0.25% lower at 15,655 yuan/mt. The decline was capped as suppliers of secondary lead firmed up offers. However, the upward momentum in the contract will also be limited given slower operation at downstream battery mills and a broad economic slowdown. The contract is expected to trade with pressure from 16,000 yuan/mt tonight. 

Tin: The most-active SHFE January 2020 contract moved steadily around 135,000 yuan/mt, with an intraday high of 135,170 yuan/mt, ending up 0.27% at 135,000 yuan/mt. Pressure above is expected at 135,700 yuan/mt tonight.