Metals News
SMM Evening Comments (Dec 3)
price review forecast
Dec 3,2019

SHANGHAI, Dec 3 (SMM) – SHFE nonferrous metals, except for aluminium, closed lower on Tuesday. Lead led the losses and ended down 1.86%. Copper lost 0.32%, zinc fell 0.34%, tin shed 0.19%, nickel dropped 0.33%, while aluminium gained 0.36%. 

The ferrous complex traded mostly higher as iron ore added 1.72%, hot-rolled coil increased 0.08%, stainless steel rose 0.25%, coke went up 1.11%, while rebar lost 0.22%. 

Copper: The most-liquid SHFE 2001 contract extended decline from overnight and returned to the 47,100 yuan/mt level as global trade uncertainties spurred safe-haven demand and China’s manufacturing data failed to allay lingering doubts of an economic slowdown. The contract fell 0.32% on the day and finished at 47,080 yuan/mt, with departing longs reducing open interest by 6,252 lots to 197,000 lots. Bearish signals from the technical indicators may keep the contract testing support from 47,000 yuan/mt tonight. 

Aluminium: The most-liquid SHFE 2001 contract trimmed increase from the prior three sessions as long position booked profits and exited. The contract fell below the 60-day moving average and hit a low of 13,915 yuan/mt, but still ended 0.36% higher on the day at 13,945 yuan/mt. Prices will be underpinned and rangebound if primary aluminium inventories continue to shrink. The key 14,000 yuan/mt level will be watched in the near term. 

Zinc: The most-traded SHFE 2001 contract stemmed decline from the previous session, climbing to an intraday high of 17,870 yuan/mt and closed at 17,815 yuan/mt, 0.34% lower on the day. While the five-day moving average prevented the contract from rising further, the Bollinger lower band offered some support. Uncertainty around macroeconomic development may grow downside risk in prices. Tonight, support from the Bollinger lower band will be monitored. 

Nickel: Declines in Shanghai nickel slowed on Tuesday as the most-traded SHFE 2002 contract hovered around 108,150 yuan/mt and closed down 0.33% on the day at 108,240 yuan/mt, marking the fourth straight day of decline. It is seen testing support from 108,000 yuan/mt tonight. 

Lead: The most-traded SHFE 2001 contract appears to begin a new round of downside trend, as loaded-up shorts weighing it to a low of 15,030 yuan/mt, before the contract ended at 15,050 yuan/mt, down 1.86% on the day. Open interest grew 3,784 lots to 79,342 lots as investors added the bearish position. Current prices have approached the costs at secondary lead smelters. Purchasing prices of feedstock battery scrap, as well as the 15,000 yuan/mt level for the contract, will be monitored tonight. 

Tin: The most-traded SHFE 2001 contract regained part of the overnight losses as investors added longs and cut shorts. It climbed from an intraday low of 138,250 yuan/mt and finished at 138,600 yuan/mt, still down 0.19% on the day. Pressure is seen from 139,500 yuan/mt tonight, with support from 138,000 yuan/mt. 

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