SMM Evening Comments (Dec 24)

SHANGHAI, Dec 24 (SMM) – SHFE nonferrous metals closed mixed while ferrous complex fell for the most part on Monday. 

Zinc led the losses and closed 2.18% lower. Lead and copper dipped over 0.5%, tin edged down, while aluminium and nickel increased. Rebar, iron ore, and hot-rolled coil fell more than 1%, coke lost 0.35%, while coking coal nudged up. 

Copper: The SHFE 1902 contract ended two consecutive trading days of gains as shorts weighed it 0.52% lower on the day to 48,100 yuan/mt. While the Bollinger middle band provided some support, the contract twice tested an intraday high of 48,270 yuan/mt in the morning. Open interests accumulated by 1,406 lots to 192,000 lots, and led to an influx of some 173 million yuan of capital across all SHFE copper contracts. As the MACD green line expanded, we expect the contract to test support at 48,000 yuan/mt tonight.  

Aluminium: The SHFE 1902 contract registered the third consecutive trading day of increase as it climbed along the five-day moving average and settled above the five-, 10-, and 20-day moving averages. A buildup of longs accounted for the increase. It ended at 13,745 yuan/mt with open interest up 288 lots to 226,000 lots. As its KDJ indicator expanded upwards and the MACD red line lengthened, the contract may stand firm above the five-day moving average tonight. 

Zinc: While shorts depressed the SHFE 1902 contract to an intraday low of 20,600 yuan/mt, lower social stocks of refined zinc limited its downward room. The contract lost 465 yuan/mt from last Friday and settled at 20,630 yuan/mt, with open interests up 14,248 lots. Tonight, we see it hovering weakly below the 20-day moving average. 

Nickel: Longs pulled up the SHFE 1905 contract in the morning as the US dollar weakened. As some longs took profits and exited, the contract dipped from an intraday high of 90,850 yuan/mt to a low of 90,200 yuan/mt near closing. It ended at 90,300 yuan/mt, with open interests up 2,000 lots to 295,000 lots. As its KDJ indicator expanded upwards and the MACD red line lengthened, it may consolidate around 90,000 yuan/mt tonight. 

Lead: Rising shorts dragged the SHFE 1902 contract below the five-, 20-, and 40-day moving averages at noon after the contract hovered above 18,000 yuan/mt in the morning. As some shorts took profits and left near closing, it rebounded and ended at 17,950 yuan/mt. The 60-day moving average continued to provide support. Tonight, the contract is likely to trade weakly around 18,000 yuan/mt, and test support at the 60-day moving average. 

Tin: The SHFE 1905 contract came off from highs at noon as longs exited the market. The contract dipped to a low of 146,310 yuan/mt and ended at 146,430 yuan/mt, with open interest down 340 lots. It remained above the five- and 20-day moving averages. Pressure above is expected at 147,500 yuan/mt in the short run.