SHANGHAI, Aug 22 (SMM) – SHFE nonferrous metals closed mixed on Thursday. Zinc rose 0.8%, lead and aluminium advanced close to 0.1%, while copper and tin shed 0.2%, and nickel fell 0.8%.
The ferrous complex rebounded across the board. Rebar climbed 1.3%, iron ore gained 1.1%, coking coal and hot-rolled coil increased by 0.6%, and coke rose 0.3%.
Copper: As shorts flocked to the market, the most active SHFE 1910 contract relinquished overnight gains to a two-week low of 46,230 yuan/mt, before it recovered some ground to end the trading day 0.17% lower at 46,310 yuan/mt. Weak economic conditions prompted shorts to build positions, resulting in the pull-back in copper prices. SHFE copper also faces resistance from several moving averages. Whether the contract could hold onto its ground at 46,200 yuan/mt is crucial to watch tonight.
Aluminium: The most traded SHFE 1910 contract fluctuated to end the day marginally higher at 14,340 yuan/mt, with open interest shrinking 4,672 lots to 358,648 lots. A decline in operating capacity in Shandong and Xinjiang and the upcoming consumption pick-up will keep SHFE aluminium robust in the short term, but upside potential is hampered by higher inventories. SMM data showed that social inventories of primary aluminium ingots in China rose for a fourth straight week, gaining 12,000 mt in the week ended August 22. SHFE aluminium is expected to hover in a smaller range at highs.
Zinc: The most active SHFE 1910 contract pared some earlier losses to finish the trading day 0.81% higher at 18,625 yuan/mt. The unwinding of short positions primarily accounted for today’s gains. SHFE zinc has remained rangebound for more than two weeks. With weak morale among longs, the contract is likely to remain weak tonight, awaiting cues from its LME counterpart.
Nickel: The most traded SHFE 1910 contract fell to a week-low of 121,770 yuan/mt, before it recovered some losses to end the day 0.78% lower at 122,930 yuan/mt. About 150 million yuan of funds flowed out of the contract on the day. Whether SHFE nickel could remain above 122,600 yuan/mt will come under scrutiny tonight.
Lead: The most active SHFE 1910 contract weakened during the day, with an intraday low of 16,970 yuan/mt, erasing overnight gains to end the day a tad higher at 17,045 yuan/mt. Today’s retreat is a healthy correction during the course of an uptrend. SHFE lead is still likely to claw back those losses tonight, as the steeply higher five-day moving average indicates upward momentum.
Tin: The buildup of short positions knocked the most traded SHFE 2001 contract to an intraday low of 130,150 yuan/mt in early morning trade, before the contract clawed back those losses to close the trading day 0.23% lower at 131,340 yuan/mt. SHFE tin is expected to remain weak and stable in the short run, with support at 130,000 yuan/mt.