SHANGHAI, Dec 24 (SMM) – Shanghai copper prices followed the London market higher to an eight-month peak in afternoon trade on Christmas eve, as optimism over US-China trade relations and easing from China’s central bank supported market sentiment.
SHFE copper added close to 1.2% on the day, and lead advanced more than 1.2% to be the biggest gainer among nonferrous metals. Aluminium rose 0.3%, while nickel shed 0.5%, tin fell 0.9% and zinc dropped 1.1%.
Zinc was the worst performer on the day, slipping to its weakest in nearly two weeks, but declines were limited by relatively low inventories.
The ferrous complex, except for iron ore, drifted lower. Coking coal tumbled 2.3% to lead the losses, coke declined 0.9%, stainless steel slid 0.8%, rebar fell 0.7%, and hot-rolled coil lost 0.3%.
Copper: The most active SHFE 2002 contract climbed to its highest since April 19 at 49,640 yuan/mt in afternoon trade, as longs flocked in on the back of a jump in LME copper. SHFE copper finished the trading day 1.16% higher at 49,590 yuan/mt, with KDJ indicators morphing into a golden cross. Whether SHFE copper could hold above 49,500 yuan/mt will come under scrutiny tonight.
Aluminium: The most traded SHFE 2002 contract strengthened during the day, ending 0.25% firmer at 14,235 yuan/mt. It is likely to drift higher along the five-day moving average tonight. SMM will release its weekly aluminium social inventory data on Thursday, which are expected to decline by a smaller margin this week due to an increase in arrivals.
Zinc: The most active SHFE 2002 contract extended overnight decline to a nearly two-week low of 17,835 yuan/mt in morning trade, before it recovered some ground to close the trading day 1.13% weaker at 17,915 yuan/mt. Two consecutive days of declines sent SHFE zinc further away from the 18,000 yuan/mt level and towards the lower Bollinger band. SHFE zinc is likely to remain weak tonight.
Nickel: The most traded SHFE 2002 contract rallied to its highest since November 28 at 114,090 yuan/mt in afternoon trade, before it erased all those gains to close 0.53% weaker at 112,720 yuan/mt. The unwinding of long positions primarily accounted for today’s losses. Support at the five-day moving average and resistance at 114,000 yuan/mt will come under scrutiny tonight.
Lead: The most active SHFE 2002 contract climbed to end at an intraday high of 15,090 yuan/mt, gaining 1.21% on the day, as shorts exited in view of firm spot premiums. SHFE lead is expected to track gains in LME copper tonight, but the rally is unlikely to be sustained in the absence of longs’ participation.
Tin: The load-up of short positions knocked the most traded SHFE 2005 contract to a one-week low of 138,600 yuan/mt, before the contract closed the trading day 0.86% lower at 138,700 yuan/mt. Support is seen at 138,000 yuan/mt.