SMM Evening Comments (Dec 4)

Price Review & Forecast 05:49:20PM Dec 04, 2018 Source:SMM

SHANGHAI, Dec 4 (SMM) – SHFE nonferrous metals closed mixed on Tuesday with zinc leading the increases and rising 1.01%. Tin jumped 0.76%, nickel gained 0.22%, aluminium rose 0.15%, while copper lost 0.66%, and lead inched down.

The ferrous complex increased across the board as coke led the gains and surged 4.79%. Hot-rolled coil grew 1.02%, and rebar went up 2.17%.

Copper: Weaker LME copper depressed confidence across longs in the SHFE copper contracts. The SHFE 1902 contract dipped to an intraday low of 49,620 yuan/mt, and ended at 49,660 yuan/mt, with open interests down 1,196 lots. Open interests across all SHFE copper contracts fell below 500,000 lots, indicating an outflow of 307 million yuan of capital. With support at the 120-day moving average, the 1902 contract is expected to test support at the five-day moving average, or the 49,660 yuan/mt level tonight. 

Aluminium: The SHFE 1901 contract dipped after opening, to an intraday low of 13,750 yuan/mt. It then rebounded to above the daily moving average and closed above the 20-day average at 13,800 yuan/mt. Its KDJ indicators expanded upwards and the MACD red line lengthened. Fundamentals will see the contract trade rangebound around current levels tonight.

Zinc: Rising longs buoyed the SHFE 1902 contract during the afternoon trading session, after it unsuccessfully tested pressure at the daily moving average in the morning. With support at around 20,670 yuan/mt, the contract climbed to a high of 20,930 yuan/mt, testing resistance at the 40-day moving average. We expect it to continue to test pressure above at that level tonight. Technical pressure will limit its increase in the short run.

Nickel: A weaker US dollar bolstered the SHFE 1901 contract, which settled slightly higher on the day at 92,020 yuan/mt after it dropped to an intraday low of 91,240 yuan/mt. Its open interests lost 8,280 lots to 203,000 lots. We expect it to consolidate around 92,000 yuan/mt tonight as its KDJ indicators expanded upwards and the MACD red line lengthened. 

Lead: The SHFE 1901 contract hovered around its daily moving average today. Rebounded SHFE zinc contracts pulled it up in the afternoon, to the 18,490 yuan/mt level, but limited upward momentum settled it 0.27% lower on the day at 18,475 yuan/mt. Heavy pressure is seen at 18,500 yuan/mt in the short run. The contract may trade weakly rangebound tonight. 

Tin: The SHFE 1901 contract rebounded in the afternoon, from a low of 144,300 yuan/mt, and settled 670 yuan/mt higher on the day at 145,370 yuan/mt. Its open interests extended declines by 1,402 lots to 22,234 lots, while that of the SHFE 1905 contract accumulated to 22,222 lots. Tonight, pressure above is expected at the 10-day moving average, or the 145,700 yuan/mt level for the 1901 contract. 

SMM Evening Comments (Dec 4)

Price Review & Forecast 05:49:20PM Dec 04, 2018 Source:SMM

SHANGHAI, Dec 4 (SMM) – SHFE nonferrous metals closed mixed on Tuesday with zinc leading the increases and rising 1.01%. Tin jumped 0.76%, nickel gained 0.22%, aluminium rose 0.15%, while copper lost 0.66%, and lead inched down.

The ferrous complex increased across the board as coke led the gains and surged 4.79%. Hot-rolled coil grew 1.02%, and rebar went up 2.17%.

Copper: Weaker LME copper depressed confidence across longs in the SHFE copper contracts. The SHFE 1902 contract dipped to an intraday low of 49,620 yuan/mt, and ended at 49,660 yuan/mt, with open interests down 1,196 lots. Open interests across all SHFE copper contracts fell below 500,000 lots, indicating an outflow of 307 million yuan of capital. With support at the 120-day moving average, the 1902 contract is expected to test support at the five-day moving average, or the 49,660 yuan/mt level tonight. 

Aluminium: The SHFE 1901 contract dipped after opening, to an intraday low of 13,750 yuan/mt. It then rebounded to above the daily moving average and closed above the 20-day average at 13,800 yuan/mt. Its KDJ indicators expanded upwards and the MACD red line lengthened. Fundamentals will see the contract trade rangebound around current levels tonight.

Zinc: Rising longs buoyed the SHFE 1902 contract during the afternoon trading session, after it unsuccessfully tested pressure at the daily moving average in the morning. With support at around 20,670 yuan/mt, the contract climbed to a high of 20,930 yuan/mt, testing resistance at the 40-day moving average. We expect it to continue to test pressure above at that level tonight. Technical pressure will limit its increase in the short run.

Nickel: A weaker US dollar bolstered the SHFE 1901 contract, which settled slightly higher on the day at 92,020 yuan/mt after it dropped to an intraday low of 91,240 yuan/mt. Its open interests lost 8,280 lots to 203,000 lots. We expect it to consolidate around 92,000 yuan/mt tonight as its KDJ indicators expanded upwards and the MACD red line lengthened. 

Lead: The SHFE 1901 contract hovered around its daily moving average today. Rebounded SHFE zinc contracts pulled it up in the afternoon, to the 18,490 yuan/mt level, but limited upward momentum settled it 0.27% lower on the day at 18,475 yuan/mt. Heavy pressure is seen at 18,500 yuan/mt in the short run. The contract may trade weakly rangebound tonight. 

Tin: The SHFE 1901 contract rebounded in the afternoon, from a low of 144,300 yuan/mt, and settled 670 yuan/mt higher on the day at 145,370 yuan/mt. Its open interests extended declines by 1,402 lots to 22,234 lots, while that of the SHFE 1905 contract accumulated to 22,222 lots. Tonight, pressure above is expected at the 10-day moving average, or the 145,700 yuan/mt level for the 1901 contract.