SMM Evening Comments (Nov 15)

SHANGHAI, Nov 15 (SMM) – SHFE nonferrous metals traded higher across the board on Thursday. Zinc jumped 1.62%, tin and lead increased by 1.45%, copper climbed 1.1%, nickel gained 0.88% and aluminium edged up 0.07%.

The ferrous complex, except for rebar, also broadly ended in the black. Coke and coking coal surged some 2.5%, iron ore rose close to 0.9% hot-rolled coil advanced 0.6%.

Copper: As longs added and shorts cut their positions, the SHFE 1901 contract jumped to close near the day’s highs of 49,580 yuan/mt. This helped it to recover all the losses earlier this week. The contract approached the middle Bollinger band and faced pressure at the 20- and 40-day moving averages which adhered to each other. Its KDJ lines converged with a shortened MACD green bar. Market participants should monitor whether the contract can extend its gains to the 49,700 yuan/mt level tonight.

Aluminium: The SHFE 1901 contract rebounded from the day’s lows of 13,710 yuan/mt to end the trading day higher at 13,785 yuan/mt. But the gains were moderate and the contract remained under pressure from the five-day moving average.

Zinc: As longs added and shorts cut their positions, the SHFE 1901 contract surged to close near the day’s highs of 21,360 yuan/mt, near the 20-day moving average. Its strong LME counterpart is likely to provide some support to SHFE zinc. Market participants should monitor whether the contract can shrug off resistance at the 40-day moving average tonight. The SHFE 1811 contract expired today with settlement price at 21,530 yuan/mt and delivery volume of 9,350 mt.

Nickel: The SHFE 1901 contract surged through the five-day moving average in the afternoon and closed at 95,250 yuan/mt after hovering around 94,150 yuan/mt in the morning. Its KDJ lines converged with a shortened MACD green line. Market participants should monitor whether the contract can hold on to the gains and stand firmly above 94,000 yuan/mt tonight.

Lead: After initial mild gains, the SHFE 1901 contract traded rangebound around 18,270 yuan/mt to finish the trading day at 18,250 yuan/mt. The contract entered the range between the middle and upper Bollinger bands, with the five-day moving average expanding upwards. It is likely to test pressure at the upper Bollinger band, at 18,386 yuan/mt, tonight with support at the five-day moving average. The SHFE 1811 contract expired after a quiet trading day and settled at 18,770 yuan/mt and delivered cargoes of 5,825 mt.

Tin: The SHFE 1901 contract extended its overnight sharp gains to close at 153,740 yuan/mt with the day’s highs exceeding 154,000 yuan/mt. Anticipation of smaller supplies encouraged longs to add their bets. We expect the contract to remain robust into near term with resistance at 158,000 yuan/mt.