SMM Evening Comments (Nov 8)

SHANGHAI, Nov 8 (SMM) – SHFE nonferrous metals closed mixed on Friday as investors digested recent developments on the US-China trade front.

Aluminium advanced 0.7%, tin and copper rose close to 0.2%, while lead slipped 0.2%, nickel fell 0.4% and zinc shed 0.5%.

The ferrous complex, except for coking coal, moved lower. Iron ore led the losses with a 2.8% decline, hot-rolled coil and stainless steel dropped 0.9%, rebar slid 0.8% and coke edged down 0.1%.

Copper: The SHFE 1912 contract shed overnight gains to close the trading day 0.15% firmer at 47,240 yuan/mt, as investors shifted their focus back to economic growth concerns after cheering overnight developments on the US-China trade front. Trade optimism is likely to help SHFE copper test 47,400 yuan/mt tonight, which has returned above the 10-day moving average.

Aluminium: The SHFE 1912 contract climbed during the daytime session to end 0.65% higher at 14,030 yuan/mt, as trade talk hopes and a short squeeze prompted bearish investors to cover positions or move to later-dated contracts. SHFE aluminium, which has stood above the 40-day moving average, is likely to continue to strengthen in seesaw trade tonight.  

Zinc: The 2001 contract became the most active SHFE zinc contract. It dropped during the daytime session, giving up overnight gains to close 0.45% lower at 18,610 yuan/mt. SHFE zinc has fallen for four consecutive days, and is likely to extend its decline tonight, in view of an increase in social inventories and weak consumption. Support at the lower Bollinger band will be closely watched.

Nickel: The SHFE 1912 contract eased in afternoon trade and ended at 130,570 yuan/mt, down 0.39% on the day. With resistance at several moving averages, whether SHFE nickel could remain above 130,000 yuan/mt will come under scrutiny tonight.

Lead: The SHFE 1912 contract hovered in a 100 yuan/mt range around the daily moving average during the daytime session, and ended down 0.16% at 16,100 yuan/mt, after touching a low of 16,005 yuan/mt overnight. A weaker LME counterpart and a weekly gain of 7,500 mt in SHFE inventories will force SHFE lead to continue to test 16,000 yuan/mt tonight.

Tin: The SHFE 2001 contract recovered from earlier losses to close the trading day 0.18% higher at 137,180 yuan/mt. Support is seen at the five-day moving average at 136,800 yuan/mt.