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SMM Evening Comments (Nov 23)
Nov 23,2018 18:11CST
price review forecast
SMM Evening Comments

SHANGHAI, Nov 23 (SMM) – SHFE nonferrous metals, except for lead, finished the trading day lower across the board. Nickel slumped 2.8%, tin plunged 2.2%, zinc dropped 1%, copper slid 0.2% and aluminium edged down 0.04%.

The ferrous complex was also broadly in negative territory. Iron ore tumbled 4.6%, hot-rolled coil slumped 3.8%, coke plunged 3.7%, rebar decreased 2.6% and coking coal declined 1.8%.

Copper: The SHFE 1901 contract fell into negative territory and closed at 49,400 yuan/mt after it extended overnight gains to the day’s highs of 49,820 yuan/mt. This sent the contract to the range between the middle and lower Bollinger bands, posting a four-day losing streak. Support came from the 10-day moving average with converging KDJ lines. Market participants tonight should monitor if the contract can hang on to the 10-day moving average at 49,368 yuan/mt.

Aluminium: As longs aggressively cut their bets, the SHFE 1901 contract tumbled during the day and closed at 13,775 yuan/mt. This prompted the contract to give up the gains made overnight and in early morning trade. Open interest for the contract shrank 14,464 lots to 242,646 lots. We expect the contract to continue to weaken and test support at the five-day moving average tonight.

Zinc: Despite initial gains in early morning trade, the SHFE 1901 contract tumbled past the 60-day moving average during the day and closed at 20,890 yuan/mt as shorts aggressively added their bets. We expect the contract to hover just shy of the 60-day moving average tonight.

Nickel: The SHFE 1901 contract extended overnight decline to the lowest in close to one year at 87,660 yuan/mt before some 15,000-lot short-covering pushed the contract up to close at 88,490 yuan/mt. KDJ lines converged and MACD green bar extended. Market participants should monitor whether the contract can hold on to the 88,000 yuan/mt level tonight.

Lead: The SHFE 1901 contract weakened to close at 18,480 yuan/mt as short-term longs took profits after the contract jumped to the day’s highs of 18,585 yuan/mt. The contract now stands around the upper Bollinger band and is likely to test pressure at 18,500 yuan/mt tonight. It is unlikely to see an uptrend without significant stimulus.

Tin: The SHFE 1901 contract extended overnight losses to end at 146,210 yuan/mt. It has slumped for four consecutive days and lost most of the recent gains. We expect the contract to test support at 145,000 yuan/mt tonight.

Evening comments

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