SMM Evening Comments (Feb 19)

SHANGHAI, Feb 19 (SMM) – SHFE base metals ended mixed as sentiment improved on Tuesday February 19. Nickel, tin, and copper increased more than 1%, while lead lost some 1%, zinc fell 0.35%, and aluminium edged down. 

The ferrous complex mostly settled higher as hot-rolled coil jumped by 1%. Coke climbed 0.87%, rebar went up 0.27%, while iron ore went flat, and coking coal slid 1.06%.

Copper: The SHFE 1904 contract climbed and settled above the Bollinger upper band with buoyance from longs. It shrugged off pressure at the daily moving average and hit an intraday high of 49,410 yuan/mt around noon. The contract closed 1.13% higher on the day at 49,280 yuan/mt, with open interests up 10,668 lots to 233,000 lots.An increase of 4,922 lots in open interests was seen in all SHFE copper contracts, with longs taking up the majority. Tonight, we see the 1904 contract testing resistance at 49,500 yuan/mt.

Aluminium: The SHFE 1904 contract ended around the Bollinger middle band at 13,465 yuan/mt, after shorts weighed it to a low of 13,435 yuan/mt in the morning. This ceased its consecutive increase for five trading days. Open interests accumulated by 2,460 lots to 215,000 lots. Changes in long and short positions and expectations of downstream demand will affect prices tonight. 

Zinc: The SHFE 1904 contract consolidated in a broad range around the daily moving average as longs and shorts struggled with each other. With support at the five- and 20-day moving averages, it tested pressure at the 10-day moving average, with an intraday high of 21,550 yuan/mt. An increase of 13,540 lots in open interests saw the contract ended at 21,435 yuan/mt. It is likely to continue the rangebound trend tonight. 

Nickel: The SHFE 1905 contract rebounded after it dipped to a low of 98,600 yuan/mt before noon. Pressure above at 99,000 yuan/mt kept it below that level in the afternoon, but exiting shorts near closing lifted and ended it at 99,070 yuan/mt. Open interests grew 16,000 lots to 313,000 lots. As its MACD red line shortened, the contract is likely to consolidate around 99,000 yuan/mt tonight. 

Lead: The SHFE 1903 contract hovered weakly today with an intraday low of 16,740 yuan/mt before noon. The 16,800 yuan/mt level provided some support and settled the contract at 16,830 yuan/mt. Open interests lost 2,380 lots to 34,436 lots. We expect the contract to consolidate above 16,800 yuan/mt tonight. 

Tin: A buildup of long bolstered the SHFE 1905 contract above the daily moving average, to an intraday high of 150,800 yuan/mt near closing. It settled at 150,750 yuan/mt with open interests up 2,836 lots to 34,582 lots. The five- and 10-day moving averages provided support. Tonight, the contract is likely to test support at 150,000 yuan/mt.