SHANGHAI, Feb 22 (SMM) – SHFE nonferrous metals, except for tin, ended higher on Friday February 22. Nickel jumped 1.58%, lead climbed 1.46%, aluminium grew 1.22%, and copper and zinc increased 0.28%.
The ferrous complex also strengthened as rebar gained 1.61%, coke went up 1.62%, and hot-rolled coil closed 0.93% higher.
Copper: Trade hopes between China and the US, as well as a stronger LME copper, buoyed the SHFE 1904 contract in the afternoon, after it fell below the daily moving average and hovered above 49,630 yuan/mt. The contract ended at an intraday high of 49,920 yuan/mt, with open interests up 2,222 lots to 251,000 lots. Open interests across all SHFE copper contracts expanded 8,554 lots to 664,000 lots, with longs accounting for the most. With support at the five-day moving average, the 1904 contract is likely to test resistance at 50,000 yuan/mt tonight.
Aluminium: The SHFE 1904 contract shrugged off pressure from all moving averages, and climbed to a high of 13,695 yuan/mt near closing, as longs entered. It settled at 13,685 yuan/mt with open interests up 10,804 lots to 228,000 lots. Expectations on higher downstream demand in March-May also supported prices. However, fundamentals are likely to limit upward room in the contract tonight.
Zinc: Seasonality factor grew social inventories of refined zinc by over 20,000 mt from pre-CNY, and this dragged the SHFE 1904 contract in the morning. However, support at the five- and 20- day moving averages, and a higher LME zinc lifted the contract, to highs of 21,680 yuan/mt at closing. We expect its robust LME counterpart to buoy it above the 10-day moving average tonight.
Nickel: A weaker US dollar and higher prices of crude oil pulled up the SHFE 1905 contract in the afternoon, to a nearly four-month high of 102,740 yuan/mt. This came after it hovered around the daily moving average in the morning. It led the increases among base metal contracts as it closed 1,600 yuan/mt higher on the day at 102,700 yuan/mt. As the KDJ indicators expanded upwards and the MACD red line lengthened, the contract is likely to test pressure above at the 180-day moving average tonight.
Lead: The SHFE 1904 contract accelerated its increase in the afternoon as base metals strengthened for the most part. It jumped above the 17,000 yuan/mt level and ended at an intraday high of 17,045 yuan/mt. Tonight, we see it testing support at 17,000 yuan/mt.
Tin: As longs exited, the SHFE 1905 contract slid after opening, to an intraday low of 149,240 yuan/mt around noon. It rallied a bit in the afternoon, closing at 149,610 yuan/mt, around the 10-day moving average. We expect it to receive support at 147,000 yuan/mt, and resistance at 151,000 yuan/mt tonight.