SMM Evening Comments (Dec 17)

Published: Dec 17, 2018 17:46 (GMT+8)

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SMM Evening Comments

SHANGHAI, Dec 17 (SMM) – SHFE nonferrous metals, except for lead, increased across the board on Monday. Nickel and zinc grew over 1%. Copper, tin, and aluminium nudged up.

Ferrous complex closed mixed as iron ore went up over 1%, coke gained 0.4%, rebar increased 0.23%, while coking coal fell 0.64%, and hot-rolled coil declined 0.15%.

Copper: The SHFE 1902 contract mostly consolidated above the daily moving average with a high of 49,250 yuan/mt in the morning, supported by its LME counterpart. It settled slightly higher on the day at 49,230 yuan/mt, with open interests down 11,312 lots to 175,000 lots. Some 129 million yuan of capital left all SHFE copper contracts, the greatest among base metals. Today is the last trading day for the SHFE 1812 contract, whose settlement price stood at 49,050 yuan/mt, with a delivery volume of 10,550 mt. We expect the contract to test support at the 49,000 yuan/mt level tonight.

Aluminium: The SHFE 1902 contract successfully tested support at the five-day moving average three times, with the lowest level at 13,640 yuan/mt. The contract closed at 13,650 yuan/mt with open interest up 2,552 lots to 235,000 lots. Pressure above came from the 10- and 20-day moving averages. Tonight, the contract will continue to test support at the five-day moving average.

Zinc: A week-on-week decline in social inventories of zinc ingot buoyed confidence across longs, and pulled the SHFE 1902 contract to a high of 21,155 yuan/mt near closing. The contract ended at 21,145 yuan/mt with open interest down 3,246 lots as shorts left. It is likely to test support at 21,000 yuan/mt tonight.

Nickel: The SHFE 1905 contract tested resistance above at 91,000 yuan/mt and settled 1.87% higher on the day at 90,920 yuan/mt. Open interests surged 17,000 lots to 316,000 lots. As its KDJ indicator expanded upwards and the MACD red line lengthened, we expect the contract to hover around 90,500 yuan/mt tonight.

Lead: The most-traded SHFE 1901 contract rebounded after dipped to an intraday low of 18,255 yuan/mt. It settled at 18,380 yuan/mt, with open interests down 2,234 lots as both shorts and longs exited. Over 1,500 lots increased in open interests of the SHFE 1902 contract, which traded with support at the 40-day moving average. The 1902 contract will test resistance at the five-day moving average tonight. Settlement prices for the SHFE 1812 contract stood at 18,555 yuan/mt, with delivery volume at 15,625 mt.

Tin: The SHFE 1905 contract rallied to a high of 146,930 yuan/mt in the afternoon, after it hovered around 146,200 yuan/mt in the morning. News that China will temporarily reduce tariffs on imports of American cars from 2019 improved market sentiment. Pressure above the contract is set at 147,200 yuan/mt tonight.

Evening comments Futures movement

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