SHANGHAI, Jun 7 (SMM) – Nonferrous metals, except for SHFE zinc, rose across the board on Thursday June 7. Copper led the gains and jumped nearly 2.2%, aluminium rose nearly 2%, and lead, tin, and nickel inched up.
The ferrous complex also soared except for iron ore. Coke gained over 2%, coking coal grew over 1%, rebar rose nearly 1.5%, and hot-rolled coil inched up close to 1%.
Copper: The SHFE 1808 contract registered a fifth consecutive trading day of increase. It surged to a high of 54,360 yuan/mt with support from longs, and closed at 54,160 yuan/mt with open interests up 13,000 lots to 207,000 lots. The contract is expected to gain further above 54,000 yuan/mt tonight given the bullish outlook in the market.
Aluminium: SHFE 1807 contract hovered above the daily moving average in the morning, and surged to a high of 15,020 yuan/mt in the afternoon as investors added their longs. Open interest increased 52,344 lots to 728,420 lots. Longs grew on concerns of potential self-regulatory measures on power plants in China.
Zinc: The dominant contract changed into SHFE 1808 contract as its open interests increased 10,260 lots to 177,000 lots, while the1807 contract saw its open interests declining 9,336 lots to 160,000 lots during the day. The SHFE 1808 contract edged down with pressure from shorts while most base metals gained. It broke the support of the Bollinger upper bands with limited upward momentum. We see it hovering at that level tonight.
Nickel: As the US dollar weakened and supply concerns emerged over environmental restrictions in Inner Mongolia, the SHFE 1809 contract rebounded from a low of 117,050 yuan/mt in the morning and hovered at the daily moving average. It closed 60 yuan/mt higher from Wednesday at 118,020 yuan/mt. We see it trading rangebound at high levels tonight. Investors will take more cues from the eurozone’s seasonally adjusted GDP for the first quarter and the US initial jobless claims over the week ended June 2.
Lead: With pressure from shorts, the SHFE 1807 contract dipped to a low of 20,540 yuan/mt and closed slightly higher from Wednesday, at 20,645 yuan/mt. The contract moved close to the five-day moving average during the day, with open interests declining over 10,000 lots during the two days. It is likely to remain at current high levels tonight. Investors will monitor changes in open interests.
Tin: As investors cut their longs, the SHFE 1809 contract slumped to a low of 152,300 yuan/mt in the morning. It rebounded as pressure from shorts eased and closed at 153,450 yuan/mt, some 460 yuan/mt higher from Wednesday. Tonight, the contract is likely to retain its rangebound trend with resistance at 155,000 yuan/mt and support at 150,000 yuan/mt.
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