SHANGHAI, Jan 4 (SMM) – Most SHFE nonferrous metals traded higher on Friday. Nickel saw the biggest gain of close to 2.7%, zinc climbed 0.9%, tin gained 0.4% and aluminium advanced 0.3% while copper dipped 0.2% and lead lost 0.5%.

The ferrous complex rose across the board. Iron ore surged 3.3%, coking coal and rebar jumped some 1.9%, coke increased close to 1.6% and hot-rolled coil climbed 1.1%.

Copper: The SHFE 1903 contract climbed during the day as gains in its LME counterpart prompted shorts to unwind their positions. Premier Li Keqiang's pledge of more economic stimulus generated some purchases and short-coverings. This helped the contract to recover most of its overnight losses to close some 0.2% lower at 47,140 yuan/mt.

Aluminium: The SHFE 1903 contract inched up some 0.3% on the day, ending at 13,435 yuan/mt. Premier Li Keqiang's pledge about economic stimulus and recent losses in the US dollar index grew confidence among longs and encouraged them to load up bets. SHFE aluminium, however, is unlikely to rebound substantially in the short term given strong resistance at moving averages.

Zinc: The SHFE 1903 contract climbed to end the trading day 0.9% higher at 20,200 yuan/mt. Most shorts were keen to take profits at 20,000 yuan/mt. But resistance at moving averages capped the upside room on short-covering. The contract is expected to hover under the pressure at the five-day moving average tonight.

Nickel: The SHFE 1905 contract extended overnight gains to end the trading day 2.7% higher at 89,950 yuan/mt. Its KDJ lines diverged and expanded upwards with an extended red MACD bar. The contract is likely to try to stand above the 90,000 yuan/mt level tonight.

Lead: After it fell to a day-low of 17,520 yuan/mt, SHFE lead clawed back some losses to close the trading day 0.5% lower at 17,735 yuan/mt. We expect it to test pressure at the 60-day moving average tonight, with support at the lower Bollinger band as low as 17,695 yuan/mt.

Tin: The SHFE 1905 contract rebounded from earlier lows during the day and ended some 0.4% higher at 144,310 yuan/mt. Resistance remains at the 10-day moving average and 145,000 yuan/mt.