SMM Evening Comments (Mar 13)

SHANGHAI, Mar 13 (SMM) – SHFE base metals, except for copper and nickel, ended higher on Wednesday March 13. Zinc led the increase and jumped 2.01%, aluminium gained 0.7%, lead grew 0.23%, and tin climbed 0.17%. 

The ferrous complex closed mixed as coking coal gained 0.28%, rebar rose 0.24%, while hot-rolled coil declined 0.51%, and coke slid 0.33%. 

Copper: The SHFE 1905 contract traded firm above the five-day moving average, with the highest today at 49,420 yuan/mt in early trades. It ended at 49,340 yuan/mt, after it slid to a low of 49,240 yuan/mt. Open interests shrank 8,556 lots to 234,000 lots, with longs accounting for losses. Currently at the Bollinger middle band, the contract is expected to test support at the five-day moving average, or the 49,250 yuan/mt level tonight. 

Aluminium: As the US dollar continued to slide, the SHFE 1905 contract rose along the five-day moving average, and jumped above the 40-day moving average, to a high of 13,625 yuan/mt, before it ended at 13,605 yuan/mt. It registered the fourth consecutive trading day of increase and closed within the Bollinger upper band. It may continue to regain losses from last week and stand firm above the five-day moving average tonight. 

Zinc: The SHFE 1905 contract found support from longs, which lifted it to an intraday high of 21,980 yuan/mt in early trades. As some longs took profits and left, it dipped to around the daily moving average and settled at 21,875 yuan/mt, with open interests up 13,522 lots to 243,000 lots. Pressure above from the 22,000 yuan/mt level was heavy today. The contract is likely to continue to test that level tonight. 

Nickel: The SHFE 1905 contract dipped sharply in the afternoon, below the 20-day moving average to a low of 100,560 yuan/mt, as shorts entered. This followed after the contract traded rangebound around 102,500 yuan/mt. It closed at 101,000 yuan/mt, with open interests up 9,000 lots to 258,000 lots. As the KDJ indicators expanded downwards and the MACD green line lengthened, it may consolidate above 100,000 yuan/mt tonight. 

Lead: The SHFE 1904 contract stemmed decline as it traded rangebound after increased steeply to a high of 17,550 yuan/mt. It closed higher on the day at 17,450 yuan/mt, after it dipped to a low of 17,420 yuan/mt. Exiting shorts accounted for the gain, which is unlikely to extend tonight, given pressure from the five- and 10-day moving averages. Tonight, the contract may trade between the five-, and 60-day moving averages. 

Tin: The SHFE 1905 contract lost gains accumulated overnight and this morning, as it fell to an intraday low of 147,020 yuan/mt before closed at 147,100 yuan/mt. Support from the five-day moving average remained. It is expected to trade with pressure at the 149,000 yuan/mt level tonight.