SHANGHAI, Jun 1 (SMM) –
Copper: LME copper fell below the daily moving average after surging to a high of $6,895.5/mt as the US dollar index declined. It is expected to hover at $6,800-6,870/mt today. The SHFE 1807 contract consolidated at 51,405 yuan/mt after rising to above the daily moving average at a high of 51,570 yuan/mt as investors cut their short positions. Pressure was seen at 51,500 yuan/mt. We see it trading at 51,250-51,750 yuan/mt today with spot offers at a discount of 40 yuan/mt to a premium of 20 yuan/mt as sellers held back.
Aluminium: LME aluminium climbed all the way up to a high of $2,304/mt last night as the US dollar weakened. It is likely to test the pressure today and trade at $2,285-2,310/mt. The SHFE 1807 contract received support from longs after dipping to a low of 14,550 yuan/mt last night. Due to concerns over an intensified US-Sino trade war, the contract is expected to trade at 14,550-14,700 yuan/mt with spot discounts at 80-40 yuan/mt.
Zinc: LME zinc plunged and hovered at $3,105/mt last night due to an increase of 16,000 mt of zinc delivered to LME warehouses. However, it stood firm above the Bollinger middle bands with support at the daily moving average. We see it trading at $3,090-3,140/mt today. The SHFE 1807 contract was dragged down slightly by its LME counterpart and mostly hovered at 24,230 yuan/mt last night. It stood above the 60-day moving average with pressure at Bollinger upper bands. We expect it to trade at 24,050-24,500 yuan/mt today.
Nickel: LME nickel surged to a high of $15,370/mt overnight, bolstered by the weakening US dollar and upbeat Chinese economic data. The SHFE 1807 contract consolidated around the 115,850 yuan/mt level overnight after hitting a high of 116,160 yuan/mt. Longs continued to add their positions given the falling US dollar, the release of positive Chinese economic data as well as robust demand for stainless steel. We expect LME nickel to trade rangebound at highs today with the SHFE 1807 contract at 114,400-116,200 yuan/mt. Spot prices are seen at 113,900-115,700 yuan/mt.
Lead: LME lead hovered around the daily moving average with a wide range overnight as shorts and longs diverged. Longs pushed it up slightly higher before closure. We expect it to consolidate at highs today with support at the 10-day moving average. The SHFE 1807 contract traded around the 20,025 yuan/mt level after being bolstered to a high of 20,075 yuan/mt by longs. We expect it to continue its rangebound pattern today.
Tin: The trading level of LME tin inched up overnight, while the SHFE 1809 contract hovered at high levels and met some resistance. We expect it to remain at current levels today.
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