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SMM Evening Comments (Mar 12)
Mar 12,2019 17:29CST
price review forecast
SMM Evening Comments

SHANGHAI, Mar 12 (SMM) – SHFE base metals ended mostly higher on Tuesday March 12, as zinc jumped nearly 1.2%, copper grew 0.9%, aluminium rose 0.3%, nickel went up 0.2%, while tin and lead lost some 0.2%.

The ferrous complex also increased for the most part as rebar and hot-rolled coil increased close to 2.4%, iron ore grew 1.2%, coke climbed 0.7%, while coking coal slid 0.3%. 

Copper: The SHFE 1905 contract traded robustly, driven by its LME counterpart and rising longs. The contract climbed to a high of 49,480 yuan/mt in the afternoon, and settled at 49,450 yuan/mt, with open interests up 8,366 lots to 243,000 lots. THe price spread between the SHFE March and April contracts continued to narrow to 100 yuan/mt today. Bullish signs around the MACD and KDJ indicators are likely to see the dominant 1905 contract testing support at the five-day moving average tonight. It may rise to highs around 49,500 yuan/mt tonight. 

Aluminium: The SHFE 1905 contract shrugged off pressure from the 40-day moving average in early trades, and continued to increase to an intraday high of 13,565 yuan/mt, around the 20-day moving average at noon. It closed at 13,520 yuan/mt, with open interests down 4,988 lots as shorts exited. As social inventories of primary aluminium stemmed increase, and supportive policies like tax cuts bolstered demand, aluminium prices are expected to rebound in the short term.   

Zinc: Domestic inventories of refined zinc ceased their climb, which grew confidence in longs, and buoyed the SHFE 1905 contract to test resistance at the 10-day moving average today. It found support at 21,400 yuan/mt in early trades, and jumped to a high of 21,620 yuan/mt before it ended at 21,595 yuan/mt. This marked the second consecutive day of increase. Open interests grew 11,124 lots to 230,000 lots. Tonight, a robust LME zinc may pull the contract above the 10-day moving average. 

Nickel: With support from the 101,300 yuan/mt level, the SHFE 1905 contract rose above the 180-day moving average and met pressure at 102,300 yuan/mt. A weaker US dollar kept it around 102,300 yuan/mt in the afternoon, and ended it at 102,530 yuan/mt. Open interests declined 8,000 lots to 249,000 lots, with shorts accounting for most of the loss. As the KDJ indicators expanded downwards and the MACD green line lengthened, the contract may continue to trade above the 180-day moving average tonight.  

Lead: The SHFE 1904 contract showed no signs of ending its decline as shorts weighed it to a low of 17,355 yuan/mt after opening. It closed at 17,415 yuan/mt, after it returned above the daily moving average in the afternoon. Tonight, the contract is likely to trade between the five- and 60-day moving averages. 

Tin: The SHFE 1905 contract continued trading rangebound with an intraday high of 147,200 yuan/mt in early trades. It ended below all moving averages, at 147,040 yuan/mt, with open interests down 398 lots to 31,148 lots. It will hover around current levels with support at 145,000 yuan/mt tonight. 

Evening comments
Futures movement

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