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SMM Evening Comments (Dec 11)
Dec 11,2018 18:04CST
price review forecast
SMM Evening Comments

SHANGHAI, Dec 11 (SMM) – SHFE nonferrous metals fell across the board on Tuesday as lead led losses and slid 0.6%. Zinc declined 0.54%, nickel, aluminium, and tin edged down, while copper remained nearly flat.

The ferrous complex fell for the most part as coke slumped 1.77%, coking coal fell 0.83%, rebar and iron ore closed slightly lower, while hot-rolled coil nudged up.  

Copper: The SHFE 1902 contract received support from its stronger LME counterpart to rise above the daily moving average, after it opened at an intraday low of 48,940 yuan/mt. Pressure above at the five-day moving average weighed it from a high of 49,170 yuan/mt to settle at 49,090 yuan/mt, still above the daily moving average. Open interest inched down, while some 59.44 million yuan of capital left all SHFE copper contracts today, the greatest among base metals. As the KDJ indicators of the 1902 contract expanded downwards, we expect it to test support at 49,000 yuan/mt tonight. 

Aluminium: As the US dollar declined from highs, the SHFE 1902 contract regained overnight losses but still closed slightly lower on the day at 13,680 yuan/mt. As fundamentals remain weak, the contract is likely to sustain its weak trend tonight. 

Zinc: Limited upward momentum lowered the SHFE 1902 contract from a high of 21,060 yuan/mt, after the contract hovered below 21,000 yuan/mt in the morning. It tested support at the 60-day moving average, and settled slightly higher on the day at 20,995 yuan/mt. Open interest surged 9,326 lots. Tonight, the contract may continue to consolidate below 21,000 yuan/mt.   

Nickel: The SHFE 1905 contract registered the sixth consecutive trading day of decline as it lost 450 yuan/mt on the day and closed at 88,830 yuan/mt. Rising shorts at noon lowered it sharply to an intraday low of 88,310 yuan/mt in the afternoon. Open interests went up 18,000 lots to 272,000 lots today. As its KDJ indicators expanded downwards and the MACD red line shortened, we expect the contract to test support at 88,500 yuan/mt tonight. 

Lead: The SHFE 1901 contract fell below support at the 10-day moving average after it hovered around the daily moving average in the morning. Investors covering their longs accounted for the drop. It closed at 18,380 yuan/mt with open interests down 1,502 lots to 51,210 lots. With resistance at the 18,500 yuan/mt level, the contract is likely to test support at 20-day moving average tonight.  

Tin: The SHFE 1905 contract rebounded after it dipped to a low of 145,210 yuan/mt, as the 145,000 yuan/mt level provided support. It settled 130 yuan/mt lower on the day at 146,070 yuan/mt. The contract will continue to trade with pressure in the short run. 

Evening comments
Futures movement

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