Aluminum Outshines Other Base Metals (Jun. 20-24, 2016)

SHANGHAI, Jun. 27 (SMM) – The US dollar index hovered below 94 as it was widely expected before last Thursday that the UK would remain in the EU. Crude oil prices tested resistance at USD 50/bbl several times. Base metals prices moved higher thanks to rising crude oil and weaker US dollar. However, UK vote final result last Friday showed more people voted for Brexit. This sent British pound down nearly 10% and pushed the US dollar index up to 96.703. Base metals gave back gains. SMMI closed last week up 1.7%. 

Aluminum led gains among base metals. LME aluminum jumped to USD 1,642.5/mt, and SHFE 1608 aluminum rose to RMB 12,400/mt on falling aluminum stocks in China. Spot premiums in east China expanded to RMB 150/mt. SMMI.Al gained 3.39%.  

LME Aluminum to Swing Wildly Next Week, SMM Expects

LME copper broke through the 60-day moving average, and SHFE 1608 copper rose above RMB 36,500/mt. Suppliers in Shanghai spot market held premiums firm. SMMI.Cu gained 1.96%.   

LME zinc challenged USD 2,050/mt, and the most active SHFE zinc rose above RMB 15,850/mt. Trading was brisk last Friday after SHFE zinc plunged. SMMI.Zn was up 0.62%.  

LME nickel rose from USD 8,885/mt to USD 9,315/mt, but fell back to USD 8,850/mt after UK vote result. SHFE nickel also gave back gains. SMMI.Ni was up 0.23%.

Lead prices changed little. SHFE tin performed badly. Ample supply and weak downstream buying in Shanghai spot tin market dragged prices down. SMMI.Sn was down 0.46%. 

Market liquidity will tighten this week due to settlement at mid-year. Base metals prices will be subject to market fundamentals. Base metals will move in wide ranges, rising at first before falling back.