SMM Evening Comments (Nov 15)

SHANGHAI, Nov 15 (SMM) – SHFE nonferrous metals closed mixed on Friday. Nickel was the worst performer, with a decline of 2.4%. Aluminium fell 0.4%, copper dipped 0.1%, while lead rose 0.4% and tin gained 0.2%. Zinc stayed flat.

The ferrous complex, meanwhile, continued their strong performance and traded broadly higher. Iron ore led the gains with a 3.1% increase, rebar rose 2%, hot-rolled coil climbed 1.9%, coke advanced 1.6%, and stainless steel gained 0.2%. Coking coal slipped 0.5%.

The People's Bank of China (PBOC) on Friday unexpectedly injected 200 billion yuan through its medium-term lending facility to boost liquidity, for the second time this month, while keeping the lending rate unchanged.

Copper: The most active SHFE 2001 contract rallied to a session-high of 46,970 yuan/mt in morning trade, as its LME counterpart opened higher and the PBOC’s liquidity injection boosted market sentiment. It ended the trading day down 0.11% at 46,930 yuan/mt, partially recovered from overnight losses. SHFE copper has lost support from all near-term moving averages, with a further extended MACD green bar. Whether it could remain above 46,900 yuan/mt will come under scrutiny tonight. The SHFE 1911 contract settled at 46,790 yuan/mt, and saw 19,800 mt delivered.

Aluminium: The most traded SHFE 2001 contract fluctuated to close down 0.4% at 13,670 yuan/mt, lows in nearly five months.

Zinc: The most active SHFE 2001 contract wavered to close flat at 18,340 yuan/mt, as investors weighed falling inventories against expanding supply. SMM data showed that social inventories of refined zinc across Shanghai, Tianjin and Guangdong dropped this week, suggesting that consumption remained robust amid growing supply. The SHFE 1911 contract concluded trading with a settlement price of 18,495 yuan/mt, with 9,075 mt delivered.

Nickel: The most traded SHFE 2002 contract slipped to its lowest since August 8 at 117,760 yuan/mt in the final trading hour, before it recovered some ground to close down 2.41% at 118,470 yuan/mt. SHFE nickel has fallen below all near-term moving averages and the lower Bollinger band. It might extend its decline tonight, tracking losses in its LME counterpart. The SHFE 1911 contract settled at 129,920 yuan/mt, and saw 17,610 mt delivered.

Lead: The most active SHFE 2001 contract rallied from four-month lows during the daytime session, recovering from overnight losses to end 0.38% higher at 15,810 yuan/mt, supported by the narrowing of the spread between secondary lead prices and primary lead. Upside potential in SHFE lead is expected to be limited by its weakening LME counterpart. The SHFE 1911 contract wrapped up trading, with a settlement price of 15,880 yuan/mt, with 21,700 mt delivered.

Tin: The most traded SHFE 2001 contract weakened during the daytime session, paring overnight gains to end 0.18% higher at 134,490 yuan/mt.