SMM Evening Comments (Nov 19)

SHANGHAI, Nov 19 (SMM) – SHFE nonferrous metals, except for nickel, ended the trading day in the black across the board. Zinc climbed close to 0.7%, aluminium gained some 0.6%, copper and lead advanced about 0.4% and tin nudged up 0.12% while nickel dropped over 1.5%.

The ferrous complex, except for iron ore, ended in negative territory across the board. Rebar and coke decreased by 1.87%, hot-rolled coil fell 0.33% and coking coal slipped 0.25% while iron ore increased by 1.64%.

Copper: Tracking gains in its LME counterpart, the SHFE 1901 contract climbed to the day’s highs of 49,920 yuan/mt before it lost those gains as longs took profits and shorts added their bets. The contract then rebounded to end at 49,780 yuan/mt as longs added and shorts cut their positions by closing. The contract posted a three-day winning streak, trading at the middle Bollinger band. It is expected to try to stand above the middle Bollinger band to a high of 49,645 yuan/mt tonight.

Aluminium: After an open jump above the daily moving average, the SHFE 1901 contract climbed to a high of 13,840 yuan/mt, along the five-day moving average, as longs added and shorts cut their bets. It then hovered within a tight range to finish the trading day and hit the highest since Wednesday November 14 at 13,845 yuan/mt, above the upper Bollinger band, in late trades. While today’s gains, bolstered by dips in the US dollar and news of output cuts at some primary aluminium producers, helped the contract recover some previous losses, it remained below the 10-day moving average.   

Zinc: Gains in its LME counterpart prompted the SHFE 1901 contract to rebound to close at 21,575 yuan/mt after it fell past the daily moving average to 21,455 yuan/mt. The contract now stands above the middle Bollinger band, shrugging off resistance at several moving averages. As LME zinc extended its gains in European trading hours, the SHFE 1901 contract is likely to climb tonight.

Nickel: As shorts aggressively added their positions, the SHFE 1901 contract tumbled to the day’s lows of 92,910 yuan/mt after hovering at 94,400-94,800 yuan/mt. As some shorts took profits, the contract rebounded above 93,000 yuan/mt to close at 93,200 yuan/mt. KDJ lines diverged and expanded downwards with an extended MACD green bar. Market participants tonight should monitor whether the contract can hold on to the 93,000 yuan/mt level.

Lead: The SHFE 1901 contract came off to close at 18,205 yuan/mt as short-term longs took profits after the contract crept to the day’s highs of 18,445 yuan/mt. The contract relinquished most gains made on Friday night during the day. Its strengthening LME counterpart is likely to bolster the SHFE 1901 contract to test the upper Bollinger band as high as 18,316 yuan/mt tonight, with support at the five-day moving average.

Tin: The SHFE 1901 contract reversed earlier gains during the day and ended at 153,750 yuan/mt. The contract traded rangebound with resistance at 155,000 yuan/mt and support at 150,500 yuan/mt.