SHANGHAI, Sep 29 (SMM) – SS contract dived to below 20,000 yuan/mt today and was supported by the 20-day moving average. The contract fluctuated sideways around 20,000 yuan/mt before closing at 19,690 yuan/mt today, down 325 yuan/mt or 1.62% from the previous day, with the open interest up 11,645 lots to 56,306 lots. SMM will monitor whether the 20-day moving average can provide further support.

The sharp price decline was mainly due to the expectations of the production resumption after the National Day holiday and the withdrawal of funds before the holiday. The spot trade picked up yesterday afternoon, but quietened today, indicating that the market sitll expects the price rise after the holiday. Longs also actively entered the market after the price drop. The SS contract is expected to stabilise with narrow fluctuations and rebound slightly.