SMM Evening Comments (Nov 26)

SHANGHAI, Nov 26 (SMM) – SHFE nonferrous metals mostly fell on Tuesday, while copper was almost unchanged. Lead led the losses and slipped 1.35% amid elevated stocks. Aluminium shed 0.58%, zinc lost 0.36%, nickel dropped 0.47%, and tin edged lower.  

The ferrous complex also declined as iron ore eased 0.38%, rebar dipped 1.95%, hot-rolled coil lost 0.84%, stainless steel dropped 1.14%, and coke went down 0.46%. 

Copper: The most-active SHFE 2001 contract closed flat on the day at 47,070 yuan/mt, as concerns about demand weighed on prices after renewed hopes around a US-China trade deal pushed prices to an intraday high of 47,130 yuan/mt. Optimistic comments on US economy and central bank’s commitment to the 2% inflation goal, according to Federal Reserve Chairman Jerome Powell on Monday, kept the US dollar at highs around 98.3, which also pressured copper prices. With pressure from the Bollinger middle band, the contract is expected to test support from 47,000 yuan/mt tonight. 

Aluminium: Limited clarity around the development of fundamentals kept the most-active SHFE 2001 contract rangebound, which lost 0.58% on the day and finished at 13,755 yuan/mt. There is still some downside risk expected tonight. 

Zinc: A stronger US dollar depressed the most-active SHFE 2001 contract, which slid to an intraday low of 17,900 yuan/mt, but pared some losses to end 0.36% lower at 17,975 yuan/mt given support from the Bollinger lower band. Open interest lost 9,499 lots to 231,000 lots as longs exited. Support from the Bollinger lower band will be monitored tonight. 

Nickel: The most-traded SHFE 2002 contract trimmed increase from the previous session, closing 0.47% lower on the day at 114,170 yuan/mt. Whether it could maintain above the five-day moving average, or 114,000 yuan/mt will be closely monitored tonight. 

Lead: With pressure from higher inventories, the most-traded SHFE 2001 contract slipped to the lowest in nearly two and a half years, at 15,315 yuan/mt, before ending down 1.35% at 15,360 yuan/mt. Costs of secondary lead may underpin near-term prices as prices of battery scrap, the feedstock to produce secondary lead, remained frim. Limited downside room is seen in the SHFE contract tonight. 

Tin: The most-traded SHFE 2001 contract continued to hover steadily at highs, ending slightly lower on the day at 138,640 yuan/mt. It is expected to trade with support from 137,800 yuan/mt and pressure from 139,500 yuan/mt tonight.