SMM Evening Comments (Mar 11)

SHANGHAI, Mar 11 (SMM) – SHFE base metals ended mixed on Monday March 11, as nickel fell nearly 0.7%, tin lost some 0.6%, lead closed flat, while copper nudged up, aluminium grew 0.2%, and zinc increased close to 1%. 

The ferrous complex declined across the board. Coke slid almost 3.7%, iron ore lost 3%, coking coal dipped 2.3%, rebar went down 1.6%, and hot-rolled coil closed 0.7% lower. 

Copper: The SHFE 1905 contract ceased five consecutive days of decline as it closed 0.08% higher at 49,190 yuan/mt. A stronger LME counterpart buoyed it in the afternoon to a high of 49,210 yuan/mt before closing. This followed after it lost support at the Bollinger middle band as shorts accumulated. Open interests grew 3,578 lots to 235,000 lots, with shorts accounted for the most. Tonight, we see the contract testing pressure at 49,200 yuan/mt. 

Aluminium: The SHFE 1905 contract hovered in a broad range in the morning, with an intraday low of 13,460 yuan/mt in early trades. A decline of some 9,000 mt in social inventories of primary aluminium over the weekend, as well as recovered consumption in the east, pulled the contract to a high of 13,535 yuan/mt near closing. It ended at 13,525 yuan/mt, with open interests up 7,046 lot to 313,442 lots. As confidence in longs improved, the contract is likely to test pressure at the 20-day moving average tonight. 

Zinc: The SHFE 1905 contract received support at the 40-day moving average as the first post-CNY decline in domestic inventories of refined zinc over the weekend of March 9-10 bolstered market confidence. The contract climbed to a high of 21,565 yuan/mt before closed at 21,540 yuan/mt. Open interests gained 2,238 lots to 219,000 lots, and longs accounted for most of the buildup. Tonight, the contract is expected to test pressure at the 10-day moving average. 

Nickel: With support from the 20-day moving average, the SHFE 1905 contract rebounded after dipped sharply below 102,000 yuan/mt. This came after it traded rangebound around the daily moving average, with a high of 102,920 yuan/mt. It closed at 102,250 yuan/mt, with open interests down 14,000 lots to 257,000 lots. As its KDJ indicators expanded downwards, the contract may continue to test support at the 20-day moving average tonight. 

Lead: The SHFE 1904 contract failed to reverse its downward trend along the five-day moving average, even as longs lifted it to highs around 17,555 yuan/mt in the afternoon. Support below at the 60-day moving average remained, and this ended the contract at 17,455 yuan/mt. Tonight, it is expected to trade within the five- and 60-day moving averages. 

Tin: The SHFE 1905 contract continued trading rangebound from last Friday night, and hovered above the daily moving average this morning. Pressure from shorts dragged it in the afternoon, to an intraday low of 146,710 yuan/mt. With resistance at the 60-day moving average, it closed at 146,900 yuan/mt, with open interests up 1,178 lots to 31,546 lots. The contract is expected to trade with pressure at 148,000 yuan/mt tonight.