SHANGHAI, Jan 24 (SMM)－Nonferrous metals futures traded lower this afternoon, only nickel and tin edging up slightly. Copper led the loss among base metals with a 1.7% drop, while zinc lost 1%. Aluminium and lead slightly dropped.

The ferrous complex saw mixed trading today. While iron ore dropped 1%, coking coal, hot-rolled coil and rebar rose around 1%. Coke also gained 0.5%.

Copper: Chinese smelters have powered up productions of late with inventories building up, while downstream restocking ahead of Chinese New Year has yet to start, leaving a bearish fundamental. However, we do not see SHFE copper fall dramatically further in the short term as a correction is likely. LME copper inventory changes and the purchasing managers’ index (PMI) in the Eurozone will give cues to investors.

Aluminium: The SHFE aluminium open interest went down to 759,552 lots, lowest level seen since August last year as longs closed their positions in a bid to avoid risks. We see no clear direction and investors were reluctant to jump back in.  

Nickel: SHFE nickel is expected to stay rangebound tonight. Investors are watching out for the US existing home sales in December and the EIA weekly crude oil inventory.

Zinc: SHFE zinc is expected to stop falling tonight, following its western counterpart. Short bets were added throughout the day today due to sluggish Chinese domestic demand.

Tin: SHFE tin was stable today with resistance at 147,000 yuan/mt and support at 145,000 yuan/mt. It is set to stay rangebound in the short term.

Lead: SHFE lead still sees support from multiple moving averages following the drop today. We expect the contract to recover some loss ground tonight, tracking LME lead.

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