SMM Evening Comments (Aug 30)

SHANGHAI, Aug 30 (SMM) – SHFE nonferrous metals closed mixed on Thursday August 30. Lead surged 2.33%, zinc gained 0.4% while nickel edged down 0.05%, aluminium dipped 0.1%, tin lost 0.21% and copper slid 0.31%.

The ferrous complex, except for iron ore, fell across the board. Coking coal lost 0.67%, hot-rolled coil dropped 1.94%, rebar tumbled 2.51% and coke slumped 5.28%

Market participants tonight can take some cues from US economic data including initial jobless claims, personal spending and income.

Copper: The SHFE 1810 contract fell to a low of 48,580 yuan/mt before it regained some losses and closed the trading day 0.31% lower at 48,800 yuan/mt. The contract still failed to break through 49,000 yuan/mt, reflecting bearish market sentiment. Support is seen at the five-day moving average and resistance is seen at the 20-day moving average. We expect the contract to trade rangebound tonight.

Aluminium: The SHFE 1810 contract fell to an intraday low of 14,890 yuan/mt after it rebounded to 14,985 yuan/mt. It ended the trading day 0.1% lower at 14,950 yuan/mt. Open interest for the SHFE aluminium complex grew 28,518 lots to 767,694 lots.

Zinc: The SHFE 1810 contract recovered early losses and settled the trading day 0.4% higher at 21,310 yuan/mt after it tumbled to a low of 21,115 yuan/mt. There was significant resistance at 21,400 yuan/mt, a previously high level, while support remained at 21,000 yuan/mt. We expect the contract to consolidate tonight.

Nickel: The SHFE 1811 contract regained all early losses and climbed to a high of 110,680 yuan/mt after it tumbled to a low of 109,180 yuan/mt. It then fell again before it rebounded to close the trading day 0.05% lower at 110,260 yuan/mt. Its KDJ lines converged and expanded upwards while the MACD green line shortened. We expect the contract to hover around 110,000 yuan/mt tonight.

Lead: The SHFE 1810 contract performed strongly today, reached an intraday high of 18,700 yuan/mt and closed 2.33% higher at 18,685 yuan/mt. The contract recovered the losses made in the previous two days and broke through 18,500 yuan/mt. We expect it to extend its gains tonight.

Tin: The SHFE 1901 contract initially crept to an intraday high of 146,540 yuan/mt before it came off to close at 145,660 yuan/mt, down 0.21%. We expect it to remain rangebound with support at 143,000 yuan/mt and resistance at 147,000 yuan/mt.