SHANGHAI, Jul 30 (SMM) –
Copper: The SHFE 1809 contract closed lower after it gained for seven consecutive trading days. It broke support at the five-day moving average as its LME counterpart plunged and the US dollar rebounded. Market sentiment worsened as the offshore yuan depreciated and stood at around 6.85 per dollar this morning. During the day, open interests of the contract declined 9,880 lots to 184,000 lots, with that of SHFE 1810 and 1811 contracts rising 13,000 lots. The 1809 contract is likely to test support at the 20-day moving average tonight. Investors would take more cues tonight from the German consumer price index (CPI) and producer price index (PPI) for July.
Aluminium: With support from longs, the SHFE 1809 contract inched up to stand firm at the five- and 40-day moving average. There was pressure at 14,450 yuan/mt today. We expect the contract to continue in the trading range of 14,400-14,450 yuan/mt tonight. US exemptions on Russian aluminium giant Rusal and the development of the US dollar will be the key factors to watch tonight.
Zinc: The SHFE 1809 contract fell below the support at 21,000 yuan/mt and tumbled to a low of 20,920 yuan/mt as shorts surged. There was significant pressure at the five- and 20-day moving averages. As the longer-term moving average of the MACD shortened, the contract is expected to trade weakly tonight. Investors would take guidance from the movement of LME zinc price tonight.
Nickel: The SHFE 1809 contract received support at the 60-day moving average after it dipped to a low of 111,610 yuan/mt on a stronger US dollar. As concerns of a trade war eased and downstream demand for #300 stainless steel remained high, the contract is likely to hover at 112,000 yuan/mt tonight.
Lead: The SHFE 1809 contract extended its overnight decline during the day and lost most of gains from last week. The upward trend in its five- and 10-day moving averages also slowed down. We expect it to continue to weaken tonight with a trading range of 18,300-18,450 yuan/mt.
Tin: The SHFE 1809 contract traded rangebound at high levels after it surged to a high of 148,510 yuan/mt with buoyance from longs. While most base metals weakened on July 30, the contract gained over 1,800 yuan/mt from last Friday to close at 147,730 yuan/mt. However, as some longs took profits and left near closing, it remains unclear if gains would be sustained.