SHANGHAI, Oct 25 (SMM) – SHFE nonferrous contracts mostly closed lower while the ferrous complex extended their upside trend across the board on Thursday.
SHFE nickel led losses and fell 0.97%, copper slid 0.68%, zinc dipped 0.33%, tin went down 0.13%, while lead gained 1.37%, and aluminium nudged up.
Coking coal surged 2.28%, coke rose 2.18%, hot-rolled coil grew 1.36%, iron ore increased 1.04%, and rebar went up 0.84%.
Copper: LME copper pulled up the SHFE 1812 contract, after the contract fell to a month-low of 49,360 yuan/mt. It then faced pressure at the daily moving average, and closed at 49,760 yuan/mt, below the 20-day moving average. Support remained at the Bollinger middle band and open interests lost 3,354 lots to 162,000 lots. This brought open interests across all SHFE copper contracts below 500,000 lots. As its KDJ indicators expanded downwards and the MACD green line lengthened, the contract will test support at 49,200 yuan/mt tonight.
Aluminium: The SHFE 1812 contract registered the fifth consecutive trading day of increase, with open interests also up for five days straight. It settled above the 10-day moving average at 14,255 yuan/mt. Declines in aluminium social inventories and news about production cuts across smelters supported prices. However, the contract is likely to continue lacking strong upward momentum. It will continue to test pressure above at the 20-day moving average tonight.
Zinc: The SHFE 1812 contract received support at the 10-day moving average. It rose to a high of 22,285 yuan/mt with support from its LME counterpart. However, there was little upward momentum in the afternoon as the contract came off from highs and settled at 22,165 yuan/mt. Open interests declined 23,792 lots as both longs and shorts left the market. We expect the contract to hover around the five- and 10-day moving averages tonight, with cautious investors.
Nickel: The SHFE 1901 contract slumped to test support at the 100,000 yuan/mt level right after opening, and rebounded above the daily moving average before noon. With pressure above at 102,300 yuan/mt, it led losses among base metals contracts as it fell 1,000 yuan/mt to close at 102,040 yuan/mt. Open interests accumulated 29,000 lots with shorts accounting for the majority. We expect the contract to hover at 102,000 yuan/mt tonight as its MACD red line shortened. Investors may take more cues tonight from the US durable goods orders for September.
Lead: As investors added their longs and cut shorts, the SHFE 1812 contract jumped above the five- and 10-day moving averages, and rose to an intraday high of 18,455 yuan/mt. While most base metals fell, the contract grew 260 yuan/mt from Wednesday to settle at 18,420 yuan/mt, with significant pressure at 18,500 yuan/mt. The contract will test resistance at that level tonight.
Tin: The SHFE 1901 contract extended its rangebound trend today and hovered between 147,500-148,200 yuan/mt. As a slump in US stock markets weighed on base metals, the 1901 contract closed Thursday lower at 147,720 yuan/mt. It is expected to continue its rangebound trend in the short run with support at 146,000 yuan/mt and pressure at 149,000 yuan/mt.