SHANGHAI, May 31 (SMM) –
Copper: LME copper rebounded last night and rose twice to a high of $6,856/mt as LME copper inventory declined and the US dollar weakened. The SHFE 1807 contract was pushed up to a high of 51,370 yuan/mt as LME copper gained and shorts cut their positions. However, it inched down to close 60 yuan/mt lower at 51,270 yuan/mt with limited support. We expect LME copper to trade at $6,820-6,880/mt today with SHFE 1807 contract at 51,100-51,500 yuan/mt. Spot offers are seen at a discount of 60 yuan/mt to a premium of 10 yuan/mt with more active trading.
Aluminium: LME aluminium traded rangebound last night. It touched a high of $2,284/mt after it was dragged down by its SHFE counterpart. It is likely to retain its rangebound pattern today. The SHFE 1807 contract is expected to receive support from a declining inventory, of which data will be released today. We see it trading at 14,650-14,900 yuan/mt with spot discounts at 80-40 yuan/mt.
Zinc: LME zinc rebounded as the US dollar fell but faced pressure at the 40-day moving average overnight. As it stood above the 40-day moving average this morning, we see it testing resistance at the 60-day moving average. The SHFE 1807 zinc contract touched a one-month high of 24,460 yuan/mt last night and stood firm above the 60-day moving average as investors replaced their short positions with longs. It is likely to remain firm today at 24,150-24,650 yuan/mt.
Nickel: LME nickel hit a high of $15,190/mt overnight as the US dollar weakened. The SHFE 1807 contract touched a high of 114,200 yuan/mt overnight with solid demand for stainless steel. We expect LME nickel to trade at highs today with the SHFE 1807 contract at 111,700-113,500 yuan/mt. Spot prices are seen at 111,200-113,000 yuan/mt.
Lead: LME lead met pressure at the five-day moving average after it rose to a high of $2,450/mt on a weakened US dollar. It is likely to dip back to the 10-day moving average in the short term under pressure. The SHFE 1807 contract mostly hovered around the daily moving average overnight at 19,990 yuan/mt and failed to break its rangebound pattern.
Tin: As the US dollar fell, LME tin traded strongly around the five- and 10-day moving averages overnight. We expect it to try to break the 10-day moving average today. The SHFE 1809 contract traded around the 154,000 yuan/mt level overnight. Longs continued to enter the market and we expect it to trade at high levels in the short term with resistance at 157,500 yuan/mt.
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