SMM Evening Comments (Jan 11)

SHANGHAI, Jan 11 (SMM) – Nonferrous metals traded up for the most part today with SHFE aluminium leading the gains with 1.2% rise and nickel up 1%. Copper and zinc also edged up slightly while SHFE lead was down 0.56%.

The ferrous complex saw coking coal finish higher by 0.73% while rebar and hot-rolled coil also registered rises. Coke dropped 0.49% and iron ore slipped 0.36%.

Copper: SHFE copper stood above the five-day moving average today but we see pressure at the 10-day moving average. US weekly initial jobless claims and the Producer Price Index (PPI) in December are likely to set the tone tonight.

Nickel: Investors would also look out for the US data tonight and we expect SHFE nickel to trade in a narrow range at high levels.

Aluminium: SHFE aluminium was supported by news of mining permit issues at Guangxi Huayin Aluminium as it broke through the five-day and 10-day moving averages. However, we remained bearish on aluminium prices in the medium term on weak fundamentals.

Zinc: Market sentiment was optimistic today as funds continue to flow to the SHFE zinc contract. However, we believed the movement is passively following that of LME as fundamentals remained weak.

Lead: Lead price recorded a lower shadow below 10-day moving average, which is expected to rangebound tonight and test supporting strength of 10-day moving average below.

Tin: SHFE tin rallied today before retreated. We see pressure at 146,000 yuan/mt and support at 145,000 yuan/mt, as the contract looks set to rangebound tonight.  

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