SMM Evening Comments (Mar 27)

SHANGHAI, Mar 27 (SMM) – Nonferrous metals saw mixed trading on Tuesday March 27. SHFE nickel and tin dipped while zinc gained 1.4%. SHFE aluminium and lead rose close to 1%, and copper inched up.

Among ferrous metals, coke closed 0.7% lower. Rebar rose over 2%, hot-rolled coil gained 1.6%, iron ore and coking coal edged up about 1%.

Copper: The SHFE 1805 contract mostly traded above moving averages with small gains, but failed to hit the five-day moving average during the day. We see upward momentum but with limited room for copper prices given the outflow of funds and as worries of a trade war cooled. In the short term, copper prices are likely to stabilise at lows. The market will take guidance from comments from CEO and President of the Federal Reserve Bank of Atlanta, Raphael Bostic tonight as well as the Conference Board’s March consumer confidence index.

Aluminium: SHFE aluminium rebounded slightly as the trade tension eased and short positions exited the market. We expect it to remain firm tonight but with relatively strong pressure from the five-day moving average if no substantial progress is achieved during the negotiation between China and the US.

Zinc: SHFE zinc attempted to stay firm above 25,000 yuan/mt but met resistance. It is likely to test the five- and 10- day moving averages tonight. It is likely to continue to face pressure to stand above 25,000 yuan/mt. 

Nickel: SHFE nickel fell after it rose to a high of 97,980 yuan/mt before noon. In the afternoon, it mostly traded rangebound around 97,100 yuan/mt and closed at 97,210 yuan/mt, slightly down from the previous day. We see it testing the current level tonight. Investors will take more cues from the US' Consumer Confidence Index in March tonight.

Tin: Tin remained weak during the day while it traded below the moving average. It hit a low of 141,660 yuan/mt in the afternoon as investors cut their long positions. Prices continue fall further tonight and support is seen at 140,000 yuan/mt.

Lead: As trade tension between China and the US eased, SHFE lead closed higher today. We expect it to test support at the 18,500 yuan/mt level and consolidate tonight.

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