SMM Evening Comments (Oct 10)

SHANGHAI, Oct 10 (SMM) – 

Copper: The SHFE 1811 contract failed to stand firm above 51,000 yuan/mt as longs took profits and exited, but it received support at the daily moving average. In the afternoon, longs re-entered the market when the contract fell to an intraday low of 50,670 yuan/mt. The contract closed Wednesday in the red at 50,770 yuan/mt, with open interests up 5,674 lots to 181,000 lots. We expect it to test support at the 120-day moving average tonight. 

Aluminium: Smaller support from costs on lower alumina prices, and production resumption at Hydro's alumina refinery Alunorte dragged the SHFE 1811 contract below the 60-day moving average to an intraday low of 14,400 yuan/mt. It settled at that level, down 115 yuan/mt from Tuesday, with open interests down 1,120 lots. The dominant contract moved to the 1812 contract today, which closed at 14,425 yuan/mt. The December contract is likely to test pressure above at the five-day moving average tonight. 

Zinc: The SHFE 1811 contract rallied above the Bollinger upper band after it broke support at the daily moving average and slid to a low of 22,740 yuan/mt. It closed at 22,935 yuan/mt with open interest up 2,704 lots. We see it testing pressure above at 23,000 yuan/mt tonight with buoyance from longs. 

Nickel: With support at the 106,000 yuan/mt level, the SHFE 1811 contract rebounded from a low lower than the daily moving average, and settled at 106,210 yuan/mt. As its KDJ indicators expanded upwards and the MACD red line lengthened, the contract is expected to hover around 106,000 yuan/mt tonight.

Lead: Long positions bolstered the SHFE 1811 contract from a low of 18,005 yuan/mt, to stand above the five- and 10-day moving averages. It closed around the Bollinger middle band, with pressure above at the 20-day moving average. We see it testing resistance at that level tonight with support at the five-day moving average. 

Tin: The SHFE 1901 contract rebounded after it fell during the day when most SHFE base metals strengthened. Pressure above at 148,000 yuan/mt will weaken its upward momentum tonight.