SMM Morning Comments (Jun 30): Shanghai base metals extended gains as upbeat economic data outweighed virus fears

Telah Terbit: Jun 30, 2020 10:08 (GMT+8)
SHFE nonferrous metals traded higher across the board in Tuesday morning trade, extending gains from overnight, on the back of optimism from a record surge in US housing-market data and upbeat eurozone economic sentiment, even as the global coronavirus cases continued to climb.

SHANGHAI, Jun 30 (SMM) – SHFE nonferrous metals traded higher across the board in Tuesday morning trade, extending gains from overnight, on the back of optimism from a record surge in US housing-market data and upbeat eurozone economic sentiment, even as the global coronavirus cases continued to climb. 


Zinc held onto increase from last night and traded more than 1% higher in early trades this morning. Nickel advanced over 1%, with tin steadily higher and adding about 1%.


Overnight, LME and SHFE base metals closed higher across the board. SHFE zinc led the gains with a rise of 1.38%. SHFE copper advanced 0.21%, aluminium grew 0.66%, lead went up 0.51%, nickel climbed 0.99%, and tin added 0.65%. 


LME zinc increased 0.93%, copper rose 0.44%, aluminium climbed 0.97%, nickel closed up 0.83%, tin edged up 0.06%, and lead gained 0.76%.


Crude oil prices edged higher on Monday, following upbeat data from the US and Europe, but fears of a second wave of the pandemic kept prices from jumping further. 


Copper: Three-month LME copper moved higher on Monday with investors cutting their shorts. It finished 0.44% higher on the day at $5,969/mt, with the most-active SHFE August contract gaining 0.21% to end at 48,450 yuan/mt, following a session high of 48,590 yuan/mt. A rise in the US equity market and lingering concerns about supply disruption amid the closure of Codelco’s Chuquicamata smelter supported the red metal. Today, the SHFE contract is seen trading between 48,400-48,700 yuan/mt with LME copper at $5,960-6,020/mt. Spot premiums will likely edge lower to 150-170 yuan/mt as elevated futures sideline consumers. 


Aluminium: Three-month LME aluminium closed higher for the second consecutive session, ending at $1,613/mt, up 0.97% on the day. The most-active SHFE August contract trimmed some increase after it advanced to a session high of 13,795 yuan/mt, finishing higher on the day at 13,775 yuan/mt. It is expected to trade between 13,600-13,900 yuan/mt today with spot premiums at high levels amid tight supply. 


Zinc: Three-month LME zinc followed the stocks market and crude oil prices higher on Monday, rising to a session high of $2064/mt and ending the day 0.93% higher at $2,055/mt. LME zinc inventories shrank 0.14%, or 175 mt, on Monday to 122,850 mt, remaining at high levels. Reescalation of the coronavirus outbreak overseas dimmed investors hope for a significant rise in consumption, and this may cap the gains in LME zinc. Trading range today is expected at $2,030-2,080/mt. 
The most-active SHFE August contract climbed on a buildup of longs, as it hit a high of 16,900 yuan/mt and finished the day 1.38% higher at 16,875 yuan/mt. It regained losses from the previous session but the gradual recovery of mining operation will lift supplies and limit the upward momentum in prices. Today, the contract may hover between 16,500-17,000 yuan/mt with spot premiums of 0# Shuangyan zinc at 90-110 yuan/mt. 


Nickel: Three-month LME nickel returned back above the daily moving average after it slipped to a session low of $12,565/mt, ending up 0.83% on the day at $12,770/mt. Opening at $12,795/mt today, LME nickel is seen testing pressure from $12,800/mt. 
The most-liquid SHFE August contract gained 220 yuan/mt overnight and closed at 102,800 yuan/mt, with open interest down 3,761 lots to 82,845 lots. Pressure above from 103,000 yuan/mt will likely be tested today. 


Lead: Three-month LME lead rallied during the European trading hours last night, rising to a session high of $1,803/mt and closing the day 0.76% higher at $1,797.5/mt. The most-active SHFE contract broke up its previous high and closed the day up 0.51% at 14,715 yuan/mt. The contract may expand its upward room in the near term. 


Tin: Three-month LME tin consolidated within a broad band, as it bounced back from a low of $16,680/mt to hit a session high of $16,850/mt, ending up $10/mt on the day at $16,810/mt. With support from the 20-day moving average, it will face resistance from $17,200/mt today. 
The most-traded SHFE contract was firm above the five- and 10- day moving averages, climbing up amid departing shorts to end at 138,360 yuan/mt, up 940 yuan/mt on the day. Pressure above is seen from a previous high of 139,500 yuan/mt. 

 

 

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