SMM Evening Comments (Jun 7): Shanghai nonferrous metals ended mixed, nickel weakened 1.12%

SHANGHAI, Jun 7 (SMM) – SHFE nonferrous metals closed mixed on Monday June 7 as investors reacted to Chinese trade data for May.

Aluminium, the best performer, rose 0.74%, tin advanced 0.4% and copper went up 0.38%, while zinc edged down 0.18%, lead fell 0.99% and nickel weakened 1.12%.

The ferrous complex fell across the board. Hot-rolled coil went down 4.13%, iron ore shed 4.4%, and rebar fell 4.17%.

Copper: The most-traded SHFE 2107 copper contract finished the day 0.38% higher at 71,390 yuan/mt. Open interest fell 3,568 lots to 135,000 lots. The number of nonfarm payrolls in the US reached 559,000 in May, about twice that in April, but lower than the median estimate of economists of 675,000. The unemployment rate dropped to 5.8%. Biden attributed the new jobs to the stimulus bill, while Republicans criticized the employment report as weaker than expected. US Treasury Secretary Yellen said that the Biden administration should push forward the $4 trillion spending plan, even if it will trigger inflation and higher interest rates until next year. The US dollar index retreated to 90.14, and the yield of US bonds dropped sharply. The failure of the US dollar to continue its strong trend supported copper prices at the bottom. The Sentix investor confidence index in June in the Eurozone and whether the stronger trend of the LME copper could drive the SHFE contract to move above the 40-day moving average pressure will continue to be monitored tonight,.

Aluminium: The most-liquid SHFE 2107 aluminium contract finished the day 0.74% higher at 18,435 yuan/mt. Open interest fell 4,638 lots to 197,783 lots.

Zinc: The most-active SHFE 2107 zinc contract closed down 0.18% at 22,410 yuan/mt. Open interest fell 3,069 lots to 89,615 lots. The number of nonfarm payrolls in the US increased by 559,000 in May, and the unemployment rate in May stood at 5.8%, which was the lowest since March last year. The expectation of loose market code reduction still existed, and the contract weakened. On fundamentals, the supply at smelting end gradually recovered in June, and the import zinc continued to flow in, leading to limited upside for zinc prices. The upper 10-day and 20-day moving average will continue to be monitored tonight, and it is expected that zinc prices will continue to fluctuate weakly.

Nickel: The most-traded SHFE 2107 nickel contract ended the day 1.12% lower at 129,530 yuan/mt today. Open interest fell 9,392 lots to 118,275 lots.

Lead: The most-traded SHFE 2107 lead contract ended the day 0.99% lower at 14,945 yuan/mt. Open interest rose 7,144 lots to 79,023 lots. Domestic social inventories of lead ingots continued to pile up as scheduled. The smelter discount narrowed slightly, and the cost support of secondary lead should be monitored in the later stage.

Tin: The most-liquid SHFE 2107 tin contract fell to a session low of 203,320 yuan/mt and finished the day 0.4% higher at 203,420 yuan/mt today. Open interest fell 2,149 lots to 27,471 lots. Yunnan's power supply has not been fully restored, the smelter's willingness to ship is not high, and the market spot is still in short supply to support tin prices. Macro-control inhibited the rapid rise of bulk commodities and created resistance to tin prices. It is expected that the contract will keep fluctuating at high, and the impact of Yunnan's power curtailment recovery on the trend will be monitored. Pressure above will be seen from 210,000 yuan/mt today. Support below will be seen from 200,000 yuan/mt today.