SHANGHAI, Dec 10 (SMM) – SHFE nonferrous metals, except for nickel, extended their increase across the board on Tuesday amid improved macroeconomic sentiment. Copper led the gains and advanced 1.37%, aluminium rose 0.79%, lead and zinc grew 0.17%, tin climbed 0.98%, while nickel lost 1.35%.
The ferrous complex also traded higher. Iron ore added 1.25%, rebar increased 0.37%, hot-rolled coil gained 0.55%, stainless steel inched up, and coke rose 0.68%.
Copper: The most-liquid SHFE 2002 contract extended its increase from the previous session and broke the rangebound trend that lasted for half a year, as a stronger-than-expected rise in China's consumer inflation data boosted hopes of an improvement in demand. Decisions of deeper oil production cuts by OPEC and its allies eased supply worries and this also supported prices. The contract climbed to the highest level in nearly seven months, at 48,800 yuan/mt, before ended up 1.37% on the day at 48,690 yuan/mt. Open interest increased 41,000 lots to 267,000 lots as longs aggressively loaded up their position. Supportive fundamentals and morale among longs will likely keep the prices firm above 48,700 yuan/mt tonight.
Aluminium: Upbeat macroeconomic sentiment and domestic pre-holiday stockpiling propped up the aluminium market, as the most-traded SHFE 2001 contract gained for the second consecutive day and closed 0.79% higher at 13,990 yuan/mt. Investors covered their bearish position, sending open interest lower by 5,260 lots to 182,000 lots. The contract is expected to remain rangebound at highs levels between 13,920-14,100 yuan/mt tonight.
Zinc: The most-liquid SHFE 2002 contract rose for the sixth straight session with buoyance from low inventories and optimistic mood in the market. The contract regained losses after slumped to a low of 17,725 yuan/mt, returning above the daily moving average and closed 0.17% higher on the day at 17,925 yuan/mt. Pressure from the 20-day moving average will be monitored tonight.
Nickel: The most-active SHFE 2002 contract traded steadily on Tuesday as it hovered around the daily moving average and ended 1.35% lower on the day at 105,160 yuan/mt. As sentiment towards the outlook for nickel prices continues to weaken, the contract may test support from the five-day moving average tonight.
Lead: The most-traded SHFE 2001 contract continued its price rally and hit an intraday high of 15,155 yuan/mt, but limited upward momentum ended the contract at 15,130 yuan/mt, 0.17% higher on the day. Heavy pressure from the 10-day moving average will continue to cap its upside room tonight.
Tin: The most-traded SHFE 2001 contract pared part of the early gains as it came off from an intraday high of 141,170 yuan/mt, finishing the day 0.98% higher at 141,350 yuan/mt. The contract held above all moving averages today. Pressure from 142,000 yuan/mt will be monitored tonight.