SMM Evening Comments (Mar 1)

SHANGHAI, Mar 1 (SMM) – Nonferrous metals futures saw mixed trading on Thursday March 1 with SHFE lead dropping over 1%. Tin, copper and nickel edged down slightly, while aluminium gained some 1% and zinc inched up.

The ferrous complex continued to trade rangebound. Coking coal dropped over 1% while coke, rebar, iron ore and hot-rolled coil went up slightly.

Copper: We still see downward room for SHFE copper prices if the US dollar continues to go higher. Investors would look for cues from the US manufacturing purchasing managers' index (PMI) in February by Markit tonight.

Aluminium: SHFE aluminium went up during the day as investors bet on expectation of destocking in high season. We also expect the prices to go up further in the short term even though inventory hit record high at over 2 million mt.

Nickel: SHFE nickel was supported at the 20-day moving averages today, touching a high at 105,320 yuan/mt by noon, and closed at 104,780 yuan/mt. The US personal consumption expenditures (PCE) in January and the ISM manufacturing index for February may set the tone for the night trading session.

Zinc: SHFE zinc was dragged down by lead this afternoon, losing gains registered in the morning. We expect it to follow its LME counterpart lower tonight, testing support at the 40-day moving average.

Tin: SHFE tin slumped today as investors cut their long positions, touching a low at 147,200 yuan/mt. We expect the contract to continue to decline and test support at the 40-day moving average.

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