SMM Evening Comments (Sep 21)

Price Review & Forecast 06:09:44PM Sep 21, 2018 Source:SMM

SHANGHAI, Sep 21 (SMM) – SHFE nonferrous metals ended in mixed performance on the last trading day ahead of the Mid-Autumn Festival. Nickel surged 1.6%, tin jumped 1.4%, aluminium rose 1.1%, copper gained 0.61% while zinc lost 0.21% and lead slid 0.92%.

The ferrous complex was largely in positive territory. Coke increased 2.7%, hot-rolled coil advanced 0.55%, rebar edged up 0.14%, coking coal nudged up 0.04% while iron ore slipped 0.3%.

The market will close tonight for the festival.

Copper: As longs aggressively added their positions, the SHFE 1811 contract jumped past 50,000 yuan/mt, a psychologically-significant level, to an intraday high of 50,020 yuan/mt before it edged down to close at 49,740 yuan/mt. Open interest for the October contract shrank 8,024 lots while that for January-March contracts grew 14,198 lots. The spread between October and November contract exceeded 300 yuan/mt. On the technical front, MACD red line extended further, suggesting an open upward track for the contract.

Aluminium: The SHFE 1811 contract rebounded to close at 14,700 yuan/mt after it fell to 14,640 yuan/mt. The contract stood above the five- and 10-day moving averages and recovered most of the losses it had made since last week. Market sentiment improved after Chinese authorities said it plans to cut corporate tax. Brisk trading activity in the physical market, bolstered by downstream consumers preholiday stockpiling, also provided some support to the futures.

Zinc: The SHFE 1811 contract broke through the upper Bollinger band to an intraday high of 21,760 yuan/mt before it fell to close at 21,570 yuan/mt as longs sold into rallies. Open interest for the contract shrank 16,304 lots to 207,016 lots.

Nickel: The SHFE 1811 contract climbed past the 20-day moving average to 105,220 yuan/mt on a substantial buildup of long positions. The contract then reversed little gains and closed at 104,870 yuan/mt. On the technical front, KDJ lines expanded upwards and MACD red line lengthened.

Lead: The SHFE 1811 contract rebounded above the daily moving average after it tumbled to an intraday low of 18,205 yuan/mt on a buildup of short positions. It then pulled back below the daily moving average and ended at 18,290 yuan/mt.

Tin: The SHFE 1901 contract initially crept to the 147,000 yuan/mt level before it traded rangebound as both longs and shorts cut their positions. The contract ended at 147,400 yuan/mt. On the technical front, it has shrugged off resistance at all moving averages. First resistance is seen at 147,500 yuan/mt with second resistance at 150,000 yuan/mt.

Key Words:  Evening comments   Copper   Aluminium   Zinc   Nickel   Tin   Lead