SHANGHAI, Nov 26 (SMM) – SHFE nonferrous metals, except for nickel, ended the trading day in negative territory across the board on Monday. Zinc tumbled 2.2%, lead slid 1.8%, tin dropped 1.4%, copper slipped 0.6% and aluminium edged down 0.2%.
The ferrous complex also broadly traded lower with iron ore as the biggest loser, down close to 6% on the day. Coke plunged 5.2%, hot-rolled coil slumped 4.1%, coking coal tumbled 4% and rebar lost 3.8%.
Copper: The SHFE 1901 contract traded around the daily moving average in a tight range during the day and closed at 49,300 yuan/mt. While earlier losses on Friday night caused the contract to end in the red, it snapped a four-day losing streak. The contract now stands between the middle and lower Bollinger bands with KDJ lines diverging and expanding downwards. Market participants tonight should monitor whether support is sustained at the 60-day moving average at 49,214 yuan/mt.
Aluminium: Today, the SHFE 1901 contract extended the gains made in late trading on Friday night to the day’s highs of 13,845 yuan/mt. It then came off the highs to close at 13,805 yuan/mt, higher than Friday night’s opening price. Its daily KDJ lines expanded upwards with an extended MACD red bar. We expect the contract to climb to test the 20-day moving average tonight.
Zinc: The SHFE 1901 contract traded in a tight range during the day and closed at 20,600 yuan/mt. This failed to help the contract regain early losses made on Friday night. The contract posted a five-day losing streak with the day’s lows below the lower Bollinger band. We expect the contract to trade rangebound tonight, with support at the lower Bollinger band.
Nickel: Aggressive long-covering in morning trade forced the SHFE 1901 contract to give up gains made on Friday night and fall into deep negative territory at 88,270 yuan/mt. The contract then rebounded to close in positive territory at 89,290 yuan/mt as shorts covered their positions. Open interest for the contract shrank 76,076 lots to 291,178 lots. We expect the contract to hover around 89,000 yuan/mt tonight.
Lead: As shorts added and longs cut their positions, the SHFE 1901 contract initially fell past the five- and 10-day moving averages to the 18,185 yuan/mt level. As risk aversion sentiment prompted some longs to cover their positions, the contract extended its losses, past the 20-day moving average, to the day’s lows of 18,110 yuan/mt in late trading and ended at 18,120 yuan/mt. The steep daily loss reversed most of the recent gains in the contract with the five-day moving average turning around. We expect the contract to test pressure at the upper Bollinger band at 18,425 yuan/mt tonight, with support at the 40-day moving average.
Tin: The SHFE 1901 contract recovered earlier losses during the day and closed at 144,980 yuan/mt, with support at 145,000 yuan/mt. We expect the contract to test support at that level in the short term with next support at 142,500 yuan/mt.