SMM Evening Comments (Oct 15)

SHANGHAI, Oct 15 (SMM) – SHFE nonferrous metals continued their declines for the most part on Tuesday October 15, with nickel leading the losses and ending down 3.46%. Copper fell 0.19%, lead dropped 0.91%, tin shed 0.23%, while aluminium gained 0.22%, and zinc climbed 0.05%. 

The ferrous composite also fell further as iron ore slipped 1.15%, rebar decreased 1.67%, hot-rolled coil slid 1.27%, stainless steel slumped 2.12%, and coke ended down 2.32%. 

Copper: The most-liquid SHFE December contract traded rangebound between 46,960-47,040 yuan/mt and ended the session 0.19% lower at 46,960 yuan/mt, as the market refocused on fundamentals after bullish sentiment about US-China trade and Brexit eased. Pessimistic signs from technical indicators are likely to see the contract testing support from 46,900 yuan/mt tonight. The October contract finished its last trading session today with the settlement price at 46,900 yuan/mt and delivery volumes of 28,750 mt. 

Aluminium: The most-active SHFE contract shifted to the December contract, which halted its five straight days of decline and recovered to a high of 13,790 yuan/mt, ending up 0.22% at 13,765 yuan/mt. Shorts booked profits and exited amid a downtrend in primary aluminium social inventories. Stabilising domestic consumption may soften the downward pressure on prices this week. 

Zinc: Bolstered by morale among longs and a stronger LME zinc, the most-liquid SHFE December contract climbed above all moving averages to an intraday high of 19,090 yuan/mt. It ended the session 0.05% higher at 19,070 yuan/mt, with open interest up 13,700 lots to 193,000 lots. An intensified contango structure is expected to prop up zinc prices in the near term. Resistance above from 19,120 yuan/mt will be watched tonight. 

Nickel: The most-active SHFE December contract failed to receive support from the 40-day moving average as it hit a low of 131,380 yuan/mt and closed down 3.46% at 131,920 yuan/mt. Loaded-up shorts amid underlying weak fundamentals accounted for the decline today, while lower LME nickel inventories and stronger nickel ore prices kept longs in the market until this week. The contract is expected to struggle around 132,000 yuan/mt tonight. The settlement price of the SHFE October contract came in at 134,300 yuan/mt, with delivery volumes of 10,020 mt. 

Lead: The most-active SHFE November contract pared some overnight losses as it rose to an intraday high of 16,895 yuan/mt, ending 0.91% lower on the day at 16,810 yuan/mt with pressure from the five- and 60- day moving averages. Support from 16,700 yuan/mt will be monitored tonight, as the contract may move down further if it lost support from 16,700 yuan/mt. The SHFE October contract settled at 16,850 yuan/mt with delivery volumes of 9,350 mt. 

Tin: The most-liquid SHFE January 2020 contract extended overnight decline as it traded below the daily moving average around 136,700 yuan/mt, and finished the trading day 0.23% lower at 136,850 yuan/mt. Pressure is seen from a previous high of 138,000 yuan/mt, with support expected from 136,000 yuan/mt tonight. The SHFE October contract settled at 135,490 yuan/mt on its last trading day.