SMM Evening Comments (Jun 29)

June 29, 2018 / news.metal.com / Article Link

SHANGHAI, Jun 29 (SMM) – Nonferrous metals futures saw mixed trading on Friday June 29. SHFE nickel gained nearly 1.1%, while zinc and lead inched up. Copper lost 0.21%, aluminium fell 0.32%, and tin closed 0.39% lower. 

The ferrous complex rose across the board with coke leading the gains with a rise of nearly 3.1%. Rebar jumped 1.9%, iron ore grew 1.6%, hot-rolled coil at 1.4% higher, and coking coal went up 1.1%. 

Copper: The SHFE 1808 contract returned to around 51,500 yuan/mt during the day after it dipped to a low of 51,090 yuan/mt last night. Given a weakened US dollar, the contract surged to a high of 51,770 yuan/mt and closed at 51,660 yuan/mt, 110 yuan/mt lower from Thursday. We see it hovering at current levels tonight. Investors would take guidance tonight from the movement of the greenback, the US personal consumption expenditures (PCE) price index in May, and its consumer confidence in June surveyed by the University of Michigan.

Aluminium: The SHFE 1808 contract traded rangebound after dipping to a low of 14,110 yuan/mt as short positions increased. However, longs were more dominant in the afternoon, pushing up the contract to 14,155 yuan/mt. It closed at 14,165 yuan/mt, down 45 yuan/mt from Thursday. Declining costs at producers and pressure from fundamentals are the main reasons leading to weak aluminium prices. It is expected to remain weak next week. Key things to watch will be the development of China-US trade conflict and central bank's monetary policy. 

Zinc: The SHFE 1808 contract registered a fourth consecutive day of increase and closed at 23,305 yuan/mt, up 195 from the previous day. Eased pressure from shorts accounted for the rise given declining domestic zinc inventory. However, limited upward momentum is seen as support from longs may be fragile. The contract is expected to consolidate at the 10-day moving average tonight.  

Nickel: The SHFE 1809 contract tested resistance at 118,000 yuan/mt twice in the afternoon but failed, closing 1,270 yuan/mt higher at 117,680 yuan/mt. It saw an increase in open interests by 19,000 lots to 417,000 lots during the day. As its KDJ indicator expanded upwards and MACD green line shortened, the contract is likely to break pressure at 118,000 yuan/mt tonight. 

Lead: The SHFE 1808 contract traded along the Bollinger upper bands today with the upward trend expected in the short run. It closed at 20,460 yuan/mt, after dipping to a low of 20,370 yuan/mt near closing as longs left. Open interests reduced 802 lots to 77,344 lots today. 

Tin: The SHFE 1809 contract traded weakly and tested support at 143,000 yuan/mt today. It closed at 144,210 yuan/mt, down 570 yuan/mt from a day earlier. Support will be at 140,000 yuan/mt if it breaks support at current level. 

 

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