SHANGHAI, Dec 21 (SMM) – SHFE nonferrous and ferrous metals ended higher for the most part on Friday.
Aluminium jumped 0.66%, copper and zinc rose 0.48%, tin nudged up, while lead fell 0.22%, and nickel edged down. Rebar increased 1.53%, coke went up 0.76%, and hot-rolled coil closed 0.2% higher.
Copper: Risk aversion pushed shorts to exit the market, which buoyed the SHFE 1902 contract to a high of 48,410 yuan/mt near closing, and settled it at that level today. The 48,210 yuan/mt level provided support as it hovered at lows in the morning. The contract returned back above the daily moving average, with open interest down 8,952 lots to 191,000 lots. Some 206 million yuan of capitals flew out of all SHFE copper contracts, the greatest among base metals. We expect the 1902 contract to test resistance at 48,500 yuan/mt tonight.
Aluminium: An increase of longs by some 3,000 lots in ten minutes pulled the SHFE 1902 contract, as planned further capacity cuts across major aluminium producers improved market sentiment. It jumped to a three-day’s high of 13,775 yuan/mt at noon, and ended at 13,750 yuan/mt, above the five-, 10, and 20- day moving averages. As its KDJ indicator expanded upwards and the MACD red line lengthened, the contract may test support at the 10-day moving average tonight.
Zinc: The SHFE 1902 contract received support at the five-day moving average, but weak fundamentals weighed it at a high of 21,210 yuan/mt. It settled slightly higher on the day at 21,095 yuan/mt, with open interest up 1,506 lots. A higher SHFE/LME zinc price ratio improved expectations of imports. The contract is likely to test support at 21,000 yuan/mt tonight.
Nickel: The SHFE 1905 contract continued to consolidate between moving averages today, with the highest level at 90,410 yuan/mt. An increase of shorts in the afternoon ended it slightly lower on the day at 89,750 yuan/mt. As its MACD red line shortened, we see it hovering around 90,000 yuan/mt tonight.
Lead: Pressure at the 18,150 yuan/mt level limited increase of the SHFE 1902 contract, which started to slid near noon, and dipped to an intraday low of 18,010 yuan/mt near closing. It is expected to test resistance at 18,150 yuan/mt tonight, with support at the 20-day moving average.
Tin: As investors covered shorts and added longs, the SHFE 1905 contract climbed up steadily in the morning, to a high of 147,010 yuan/mt. It settled at 146,850 yuan/mt, around the five- and 20- day moving averages, up 1,000 yuan/mt from Thursday. Its rangebound trend will continue tonight.