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SMM Evening Comments (Feb 25)
Feb 25,2019 17:17CST
price review forecast
SMM Evening Comments

SHANGHAI, Feb 25 (SMM) – SHFE nonferrous metals increased on Monday February 25 as market sentiment improved after the US suspended a tariff hike on Chinese products. Tin led gains and jumped 1.68%, copper climbed 1.63%, lead grew 1.39%, nickel went up 1.33%, zinc closed 1.30% higher and aluminum picked up 1.06%. 

However, the ferrous complex weakened as rebar slid 0.73%, hot-rolled coil fell 0.33%, and coke dipped 0.26%. 

Copper: The SHFE 1904 contract gained significantly near closing after it consolidated around the daily moving average, given progress made in US-China trade talks. The contract ended at 50,520 yuan/mt, with open interests up 6,944 lots to 258,000 lots. Open interests across all SHFE copper contracts increased 13,510 lots, with longs accounting for the most. With support at the Bollinger upper band, the 1904 contract is expected to test resistance at 50,700 yuan/mt tonight. 

Aluminium: As longs entered, the SHFE 1904 contract shrugged off pressure at the 20-, 10-, and, five-day moving averages to an intraday high of 13,790 yuan/mt, after shorts lowered it to the five-day moving average in the morning. It closed at 13,770 yuan/mt, above all moving averages, with open interest up 12,736 lots to 241,000 lots. The KDJ indicators expanded upwards and the MACD red line lengthened. This, together with week-on-week higher shipments of primary aluminium and aluminium billet from social warehouses, are set to underpin the contract tonight. However, expanding inventories of primary aluminium will cap upward room. 

Zinc: Macroeconomic optimism development buoyed the SHFE 1904 contract at noon, which fell to a low of 21,780 yuan/mt in the morning. Pressure from growing inventories limited its increase, and ended it 185 yuan/mt higher on the day at 21,865 yuan/mt. It is unlikely to break resistance above at 22,000 yuan/mt tonight. 

Nickel: Higher LME nickel pulled up the SHFE 1905 contract after opening, to a nearly four-month high of 103,360 yuan/mt in early trades. However, a lack of confidence across longs failed to support the contract at that level, and the contract dipped three times to test support at 102,300 yuan/mt. It closed at 102,810 yuan/mt with open interest down 6,000 lots to 323,000 lots. As its KDJ indicators expanded upwards and the MACD red line lengthened, the contract is likely to consolidate at 103,000 yuan/mt tonight.

Lead: The SHFE 1904 contract stood firm above the 17,000 yuan/mt level as it found support at 17,050 yuan/mt and hovered around the daily moving average for most of the day. Pressure at the 20-day moving average settled it at 17,125 yuan/mt, with open interests up 366 lots to 43,546 lots. Tonight, we expect it to test pressure at the 20-day moving average. 

Tin: An accident at a mine operated by Yinman Mining in Inner Mongolia sparked concerns over short supplies of tin ore, and bolstered the SHFE 1905 contract. The contract traded above 150,000 yuan/mt, with an intraday high of 153,490 yuan/mt, and closed at 152,650 yuan/mt. Open interests accumulated by 2,312 lots. Supply concerns are likely to keep prices at highs in the trading days ahead. Pressure above is set at 155,000 yuan/mt. 

Evening comments
Futures movement

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