SMM Evening Comments (Dec 7)

Price Review & Forecast 07:08:18PM Dec 07, 2018 Source:SMM

SHANGHAI, Dec 7 (SMM) – SHFE nonferrous metals and ferrous complex rallied for the most part on Friday. Zinc jumped 2%, lead, tin, and copper closed slightly higher, while nickel fell 1.32%, and aluminium edged down. 

Coke surged 4.6%, coking coal increased 3.08%, iron ore went up 1.88%, hot-rolled coil nudged up, while rebar lost 0.59%. 

Copper: The SHFE 1902 contract ended its three consecutive trading days of decline as a softened US dollar and a stronger LME copper benefited the contract. It increased to a high of 49,290 yuan/mt in the afternoon and closed at 49,180 yuan/mt, with open interests down 4,558 lots. Some 114 million yuan of capitals flew out of all SHFE copper contracts, the greatest among base metals contracts. We expect the 1902 contract to test support at the 49,000 yuan/mt level tonight. 

Aluminium: The SHFE 1901 contract climbed up along the five-day moving average and rallied above the daily moving average to a high of 13,645 yuan/mt. However, it closed 0.26% lower from Thursday at 13,630 yuan/mt. Its KDJ indicators remained to expand downwards, but at slower rates. Tonight, fundamentals are expected to keep the contract trade weakly, rangebound around current levels.  

Zinc: The SHFE 1902 contract was pulled by a higher LME zinc and rising longs in the afternoon, to a high of 21,460 yuan/mt near closing. Open interest surged 14,528 lost to 208,000 lots. With support at the 20-day moving average, the contract is likely to sustain its robust trend tonight. 

Nickel: The SHFE 1905 contract faced pressure at the 10-day moving average, after it rose to an intraday high of 89,700 yuan/mt. It ended at 89,580 yuan/mt with open interests surged 21,000 lots. As its MACD red line shortened, we expect it to test support at 88,500 yuan/mt tonight. Investors would take more cues tonight from the US weekly unemployment rate and nonfarm payrolls report for November, as well as the University of Michigan’s December consumer confidence index. 

Lead: The SHFE 1901 contract rallied after dipped to a low of 18,415 yuan/mt in the morning. It settled slightly higher on the day at 18,590 yuan/mt, with open interests down 1,748 lots. As pessimism from macroeconomy waned, fundamentals are likely to keep it hover below 18,600 yuan/mt tonight. 

Tin: As shorts exited the market in the afternoon, the SHFE 1901 contract climbed to an intraday high of 145,450 yuan/mt near closing. It settled at 145,300 yuan/mt, up 800 yuan/mt on the day. The contract continued to trade rangebound. Domestic supply tightness of raw materials will support the price in the short run. 

SMM Evening Comments (Dec 7)

Price Review & Forecast 07:08:18PM Dec 07, 2018 Source:SMM

SHANGHAI, Dec 7 (SMM) – SHFE nonferrous metals and ferrous complex rallied for the most part on Friday. Zinc jumped 2%, lead, tin, and copper closed slightly higher, while nickel fell 1.32%, and aluminium edged down. 

Coke surged 4.6%, coking coal increased 3.08%, iron ore went up 1.88%, hot-rolled coil nudged up, while rebar lost 0.59%. 

Copper: The SHFE 1902 contract ended its three consecutive trading days of decline as a softened US dollar and a stronger LME copper benefited the contract. It increased to a high of 49,290 yuan/mt in the afternoon and closed at 49,180 yuan/mt, with open interests down 4,558 lots. Some 114 million yuan of capitals flew out of all SHFE copper contracts, the greatest among base metals contracts. We expect the 1902 contract to test support at the 49,000 yuan/mt level tonight. 

Aluminium: The SHFE 1901 contract climbed up along the five-day moving average and rallied above the daily moving average to a high of 13,645 yuan/mt. However, it closed 0.26% lower from Thursday at 13,630 yuan/mt. Its KDJ indicators remained to expand downwards, but at slower rates. Tonight, fundamentals are expected to keep the contract trade weakly, rangebound around current levels.  

Zinc: The SHFE 1902 contract was pulled by a higher LME zinc and rising longs in the afternoon, to a high of 21,460 yuan/mt near closing. Open interest surged 14,528 lost to 208,000 lots. With support at the 20-day moving average, the contract is likely to sustain its robust trend tonight. 

Nickel: The SHFE 1905 contract faced pressure at the 10-day moving average, after it rose to an intraday high of 89,700 yuan/mt. It ended at 89,580 yuan/mt with open interests surged 21,000 lots. As its MACD red line shortened, we expect it to test support at 88,500 yuan/mt tonight. Investors would take more cues tonight from the US weekly unemployment rate and nonfarm payrolls report for November, as well as the University of Michigan’s December consumer confidence index. 

Lead: The SHFE 1901 contract rallied after dipped to a low of 18,415 yuan/mt in the morning. It settled slightly higher on the day at 18,590 yuan/mt, with open interests down 1,748 lots. As pessimism from macroeconomy waned, fundamentals are likely to keep it hover below 18,600 yuan/mt tonight. 

Tin: As shorts exited the market in the afternoon, the SHFE 1901 contract climbed to an intraday high of 145,450 yuan/mt near closing. It settled at 145,300 yuan/mt, up 800 yuan/mt on the day. The contract continued to trade rangebound. Domestic supply tightness of raw materials will support the price in the short run.