SHANGHAI, Jan 22 (SMM) – Shanghai base metals stabilised on Wednesday, paring some losses from previous sessions, as investors weighed concerns over the impact of the outbreak of a deadly virus in China.
Base metals on the Shanghai Futures Exchange, except for zinc, closed the trading day lower. Lead dropped 0.9%, nickel fell 0.4%, copper shed 0.2%, tin dipped 0.1% and aluminium edged down 0.04%.
The ferrous complex, except for iron ore, also weakened on the day. Hot-rolled coil slipped 0.8%, rebar declined 0.5%, coke and coking coal fell close to 0.3%, and stainless steel dipped 0.1%.
The SARS-like virus, which has killed at least nine people and infected more than 400, originated from the transportation hub of Wuhan in central China and has spread to cities including Beijing and Shanghai and even beyond China's borders. Fears of the pandemic prompted investors to flee risk assets on Tuesday, leading to a broad decline across base metals.
Copper: The most active SHFE 2003 contract slipped to its lowest in more than six weeks at 48,280 yuan/mt in early morning trade, before it recovered some ground to close the trading day 0.19% weaker at 48,540 yuan/mt. SHFE copper now faces stiff resistance at the 40-day moving average.
Aluminum: The most traded SHFE 2003 contract rallied in afternoon trade, clawing back earlier losses to close the day a tad lower at 14,165 yuan/mt. SHFE aluminium remains above the 10-day moving average, but its upside potential is limited by stagnated consumption ahead of the Chinese New Year holiday.
Zinc: The most active SHFE 2003 contract recovered from an earlier slip to close the trading day 0.16% higher at 18,315 yuan/mt.
Nickel: The most traded SHFE 2003 contract climbed after it slipped to six-week lows in early morning trade, and finished the trading day 0.36% lower at 108,380 yua/mt. Support lies at the lower Bollinger band, while resistance is seen at 110,000 yuan/mt where several moving averages converge.
Lead: The most active SHFE 2003 contract hovered in a 100 yuan/mt range around the daily moving average during the day, and ended down 0.92% at 15,155 yuan/mt. SHFE lead is likely to remain rangebound ahead of the CNY break, with low chances of a break below the 15,000 yuan/mt level.
Tin: The most traded SHFE 2006 contract climbed during the daytime trading session to end the trading day 0.12% weaker at 140,050 yuan/mt. Resistance is seen at the 40-day moving average at 141,500 yuan/mt.