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Ruida Futures: ZN Continues to Decline, Focusing on 18700 support

October 17 2019 17:15:26     Ruida Futures (Linda)

Sunsirs: Oct 17

Foreign and domestic trend: Today, the prices of ZSD continue the high consolidation At 15:04 (Beijing Time), the price of ZSD for 3 months is 2,418.5USD/t, the daily increase rate is 0.04%. ZN1912 continues to decrease, the price today is 18,960-18,705RMB/t, the closing price is 18,735RMB/t which is 0.95% less than that of yesterday. 210,000 lots are traded, which decreases 5,754 lots daily; Open interest is 205,000 lots, increases 8,230 lots. The basis increases to 155RMB/t; The monthly price gap between ZN1911 and ZN1912 decreases to -25RMB/t.

Market focus: (1) In Asian market, Dollar Index increased slightly, trading at 98.076, increasing 0.06%. (2) According to the latest data released by the World Bureau of Metal Statistics (WBMs), the global zinc supply gap was 189,000 tons from January to August 2019, and 6,000 tons from January to July, indicating a significant expansion of supply gap.

Spot market: On Oct 17, the SMM spot price of 0# zinc is 18,840-18,940RMB/t, the average price is 110RMB/t lower than that of the last trading day. According to SMM, downstream enterprises make the replenishment at low prices, but they are still in rigid demand inventory. As a whole, the carriers’ selling sentiment is higher than receiving.

Warehouse stock: The warehouse receipt of ZN is 35,308 tons in total, decreasing 351 tons daily; On Oct 16, the stock of ZSD was 61,475 tons, decreasing 150 tons daily, it has decreased 12 consecutive days to a new low since Sep 26. Till the week (ends on Oct 11), the stock of zinc in Shanghai Futures Exchange is 70,172 tons, increasing 2,972 tons weekly.

SVZL: ZN1912’s long position of the top 20 is 69,527 lots, the short position is 75,141 lots. The net short position is 5,614 lots, decreasing 138 lots one day. The short position is more than the long one.

Market study and determine: On October 17, ZN1912 continues to decline, returns to below the MA, short positions increase, and long positions reduce. During this period, the zinc price is pressured by the dollar index which increases slightly. Domestic stock market continues to slide today, which depresses investors' bullish atmosphere and also bullish zinc price. LME zinc inventory has dropped 11 days, making the ZSD performance strong for 3 months. In the term of spot, downstream enterprises make the replenishment at low prices, but they are still in rigid demand inventory. As a whole, the carriers’ selling sentiment is higher than receiving. Technically, ZNM’s MACD green column fluctuates slightly, KDJ crosses down, and at the same time it breaks the middle track of Boll, the 18700 support should be focused. Operationally, it is suggested that ZNM should buy long at 18,700 RMB/t and stop loss at 18,650RMB/t.

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