SMM Evening Comments (Jun 27)

SHANGHAI, Jun 27 (SMM) – SHFE nonferrous metals closed mixed on Thursday as investors awaited the meeting between US President Donald Trump and Chinese President Xi Jinping at the G-20 summit in Japan this weekend.

Lead saw the biggest loss of 1.1%, zinc fell 0.7%, copper shed 0.5% and tin lost 0.1% while aluminium nudged up 0.04% and nickel rose 1.1%.

The ferrous complex also saw mixed performance. Coke pulled back 2.3%, coking coal retreated 0.6% and hot-rolled coil declined 0.5% while rebar advanced 0.4% and iron ore rebounded 3.3%.

Copper: The most traded SHFE August contract traded rangebound around the daily moving average during the day, and failed to recover from overnight losses, closing 0.49% lower at 47,090 yuan/mt. Traders moved their positions to forward contracts. Open interest for the 1908 contract shrank about 12,000 lots, while that for the 1909 and 1910 contracts gained some 23,000 lots. With limited support from technical indicators, the contract is expected to try to stand firmly above 47,200 yuan/mt tonight.

Aluminium: The most active SHFE August contract hovered in a wide range to close the trading day higher at 13,900 yuan/mt. Open interest for the contract shrank 12,274 lots to 247,290 lots, as longs cut their positions, reflecting continued bearish sentiment.

Zinc: The most traded SHFE August contract hovered around 19,960 yuan/mt in a range of 40 yuan/mt before it slipped to an intraday low of 19,865 yuan/mt about 30 minutes before closing. It then recovered to end 0.72% lower at 19,935 yuan/mt. The contract is expected to continue to hover around the middle Bollinger band tonight.

Nickel: The most liquid SHFE August contract extended overnight gains to a six-week high of 101,820 yuan/mt before it pared some gains to close 1.07% higher at 101,310 yuan/mt. Resistance from the upper Bollinger band as high as 101,500 yuan/mt will be the focus tonight.

Lead: The most active SHFE August contract extended overnight declines during the day, and saw losses accelerate shortly before closing bell, as shorts added their positions. It finished the trading day 1.14% lower at 16,040 yuan/mt, below all short-term moving averages, with the five- and 10-day ones shaping a death cross. With bearish technical indicators, the contract is expected to test support at the 16,000 yuan/mt level tonight.

Tin: The most liquid SHFE September contract extended overnight losses to an intraday low of 143,060 yuan/mt before it recovered some ground to finish the trading day 0.12% lower at 143,690 yuan/mt. SHFE tin is expected to remain rangebound in the short term, with support at 143,500 yuan/mt, and next support at 143,000 yuan/mt.