SHANGHAI, Jul 25 (SMM) – Both SHFE nonferrous and ferrous metals rose across the board on Wednesday July 25.
Lead led the increases of across the nonferrous complex with a gain of 1.7%. Copper increased 1.4%, nickel gained 0.92%, tin rose 0.75%, zinc grew 0.59% and aluminium inched up 0.52%.
Coking coal rose 2.4%, coke gained 1.7% with hot-rolled coil and rebar up 0.79% and 0.37%, respectively. Iron ore inched up 0.32%.
Copper: The SHFE 1809 contract opened higher today, buoyed by a surge in LME copper prices. The contract stood above the 20-day moving average during the day. Threats of a strike at the Escondida mine in Chile provided support to copper prices. Technically, KDJ lines expanded upwards and the MACD red line lengthened. We expect it to try to break the 50,000 yuan/mt level tonight. Open interest of the 1808 contract shrank over 100,000 lots today. Investors would take more guidance tonight from data of the US' new home sales in June and its weekly crude oil inventory.
Aluminium: The SHFE 1809 contract edged up from the previous day and tested the 40-day moving average with support at the 10-day moving average. We expect the contract to manage to stand firmly above the 40-day moving average tonight with support from longs.
Zinc: The SHFE 1809 contract lost most of overnight gains during the day, and met strong resistance at the 20-day moving average. We expect it to continue to weaken tonight.
Nickel: While the SHFE 1809 contract fell below the daily moving average in the afternoon, it closed 1,010 yuan/mt higher from Tuesday at 110,920 yuan/mt. As shorts exited, open interests declined some 10,000 lots to 277,000 lots. We expect the contract to hover at 111,000 yuan/mt tonight, with the KDJ indicators expanded upwards and the MACD green line shortened.
Lead: The SHFE 1809 contract extended its overnight gains today with its 10-day moving average expanding upwards, reflecting upward momentum. The Chinese government’s recent fiscal stimulus accounted for the increase in lead prices. We expect the contract to test pressure at 18,900 yuan/mt tonight.
Tin: After it climbed to a high of 145,790 yuan/mt in the morning, the SHFE 1809 contract fell to a low of 145,000 yuan/mt. It hovered around 145,500 yuan/mt in the afternoon. The contract has yet to break its recent trading range though its five-, 10- and 20-day moving averages have stuck to one other and provided some support. We expect the contract to try to break through 146,000 yuan/mt tonight.