SMM Evening Comments (Nov 27)

SHANGHAI, Nov 27 (SMM) – SHFE nonferrous metals mostly fell on Wednesday, but copper rose 0.62% to hit its highest in more than two weeks amid trade optimism. Lead led the losses and fell 0.62%, aluminium declined 0.22%, tin shed 0.32%, nickel eased 0.16%, while zinc gained 0.58%. 

The ferrous complex ended lower as iron ore slipped 2.14%, rebar fell 1.24%, hot-rolled coil lost 0.42%, stainless steel dropped 1.56%, and coke went down 0.35%.

Copper: The most-active SHFE 2001 contract climbed to more than two-week high of 47,410 yuan/mt, before ending up 0.62% at 47,380 yuan/mt, lifted by improved risk appetite after positive signals from the US-China trade talks rallied market sentiment. Washington and Beijing are close to agreeing on a phase-one trade deal, US President Donald Trump said on Tuesday, adding that they are in the “final throes” of work. The contract has shrugged off resistance from the Bollinger middle band. This, coupled with bullish technical indicators, may see the contract testing support from 47,400 yuan/mt tonight. 

Aluminium: The most-liquid SHFE 2001 contract slid for the fourth consecutive session, weighed by lower costs, smaller drops in inventories and expectations of greater capacity in operation. The contract lost 0.22% on the day and finished at 13,735 yuan/mt. Declines in the contract may slow tonight as investors await for more clues on fundamentals from SMM weekly data of primary aluminium inventories to be released tomorrow. 

Zinc: The most-active SHFE 2001 contract held onto gains from overnight, hovering around 18,050 yuan/mt and finished 0.58% higher on the day at 18,075 yuan/mt. Technical indicators suggested stable support below, but a robust US dollar may cap any upside room in prices. Tonight, support is seen from 18,000 yuan/mt. 

Nickel: The most-liquid SHFE 2002 contract continued its rangebound trend as it recovered after slipped sharply to a low of 112,550 yuan/mt. It closed the trading day at 114,000 yuan/mt, down 0.16%. Heavy pressure above may see it struggling above 114,000 yuan/mt tonight. 

Lead: The most-active SHFE 2001 contract showed no signs of slower decline, falling 0.62% on the day to end at 15,290 yuan/mt amid rising bearish position. There remain downside risk in the contract as secondary lead producers still saw margins. 

Tin: The most-traded SHFE 2001 contract continued to trim gains from Monday and the previous week, as departing longs drove it to an intraday low of 138,030 yuan/mt and ended it 0.32% lower on the day at 138,180 yuan/mt. Support below is seen at 138,000 yuan/mt tonight.