SHANGHAI, Mar 6 (SMM) – Shanghai base metals closed mostly lower on Friday as coronavirus fears continued to dent sentiment.
On the Shanghai Futures Exchange, copper tumbled close to 1% to lead the losses among nonferrous metals, tin sank 0.9%, aluminium shed 0.4 and nickel slipped 0.3%, while zinc edged 0.03% higher and lead gained more than 0.1%. Base metals on the London Metal Exchange, except for lead, moved lower.
In a meeting in Vienna on Thursday, the OPEC recommended members and associated countries to cut daily oil output by 1.5 million barrels to combat the economic fallout from the COVID-19 epidemic. Oil prices slipped on the news.
The SHFE has suspended night trading session until further notice.
Copper: The most-traded SHFE 2004 contract opened lower and eased to end at 44,900 yuan/mt, moving back towards three-year lows plumbed last week. The contract now faces stiff resistance from moving averages and is unlikely to stand convincingly above 45,000 yuan/mt in the short term.
Aluminium: The most-active SHFE 2005 contract plumbed a new three-year trough of 13,080 yuan/mt in early morning trade, before it recovered some ground to end at 13,175 yuan/mt. The contract weakened later this week, as logistics recovery allowed cargoes to move to social warehouses, and growing inventories outweighed accelerated downstream recovery. The contract is expected to test the 13,000 yuan/mt level next week.
Zinc: The most-liquid SHFE 2005 contract recovered from earlier losses to end at 16,055 yuan/mt. It continued to oscillate around 16,000 yuan/mt, supported by slower inventory growth and recovering consumption. The contract is expected to remain rangebound in the short term.
Nickel: The most-traded SHFE 2006 contract hovered in a wide range during the day, and ended at 103,020 yuan/mt. Strong support lies at the five-day moving average. Whether the contract could firm above the 20-day moving average will come under scrutiny next week.
Lead: The most-liquid SHFE 2005 contract reversed an earlier slip, as longs loaded up positions. It hit an intraday high of 14,500 yuan/mt, before it eased to close at 14,465 yuan/mt. Secondary lead supply in China is expected to recover further in April, which will exert strong pressure at the 14,600 yuan/mt level.
Tin: The most-traded SHFE 2006 contract pulled back to end at 135,620 yuan/mt. Support is seen at the 20-day moving average and 135,000 yuan/mt.