SHANGHAI, May 29 (SMM) –
Copper: Three-month LME copper pulled back from earlier highs on Tuesday, lowered by a stronger US dollar on improved American consumer sentiment. It finished the trading day 0.06% higher at $5,966/mt. A weakening in LME copper drove Shanghai shorts to load up their positions overnight, sending the most active SHFE July contract down 0.38% at 47,050 yuan/mt. A large amount of funds flowed into Shanghai equities shortly before yesterday’s closing bell, which is likely to bolster the market today, while escalating US-China trade tension will continue to support the greenback and weigh on the metals market. LME copper is expected to trade between $5,940-5,990/mt today, with SHFE copper at 46,900-47,300 yuan/mt. Poor trades will limit spot premiums to 50 yuan/mt.
Aluminium: Three-month LME aluminium fluctuated between $1,799-1,814.5/mt on Tuesday and closed 0.08% higher at $1,803.5/mt. Despite an 8,100-mt decline in aluminium stocks across LME-approved warehouses, LME aluminium is expected to continue its rangebound pattern between $1,790-1,820/mt today as the greenback held firm. The most traded SHFE July contract traded 0.21% higher at 14,295 yuan/mt overnight, bolstered by long positions. Mexico on Tuesday said that it will launch anti-dumping investigation and impose temporary duties on certain aluminium foil imports from China. This is likely to impact the market today. The SHFE 1907 contract is expected to trade between 14,200-14,300 yuan/mt today, with spot premiums of up to 30 yuan/mt over the SHFE 1906 contract.
Zinc: Three-month LME zinc gave up most of the gains from a higher open on Tuesday, closing 0.16% higher at $2,559/mt, near the five-day moving average, as an anticipated supply increase in the longer term countered near-term tightness, even as backwardation on LME zinc continued to expand. We see limited upside in LME zinc, which is likely to hover between the five- and 10-day moving averages today, with most transactions at $2,540-2,590/mt. The most active SHFE July contract pared some earlier gains to close overnight 0.1% higher at 20,705 yuan/mt. SHFE zinc has stood above the 10-day moving average, with its KDJ lines expanding upwards. This, together with falling inventories, will offer support to prices, while the lacklustre spot market will dent confidence among longs. The contract is expected to hover around the 10-day moving average between 20,500-21,000 yuan/mt today.
Nickel: With a stronger US dollar, three-month LME nickel dropped 1.86% to $12,150/mt on Tuesday. With support at 98,500 yuan/mt, the most traded SHFE July contract stemmed earlier losses and hovered around 98,700 yuan/mt in a tight range to finish overnight session 2.07% lower at 98,670 yuan/mt. LME nickel is expected to trade between $12,000-12,250/mt today, with SHFE nickel at 98,000-100,000 yuan/mt. Spot prices are seen at 98,500-101,000 yuan/mt.
Lead: Following a Monday decline in its SHFE counterpart, three-month LME lead fell on Tuesday before it recovered some losses to close 0.93% lower at $1,813/mt. It failed three times to stand above the $1,825/mt level, and remained in a region between $1,790-1,850/mt. The most active SHFE July contract rebounded above the 16,000 yuan/mt mark overnight, and closed 0.09% lower at 16,035 yuan/mt. Some shorts took profits overnight. Support is seen strong at 15,900 yuan/mt in the short run.
Tin: Three-month LME tin rebounded from a low of $19,100/mt before it pared those gains to close 0.86% lower at $19,125/mt on Tuesday. Gains in the greenback accounted for Tuesday’s decline in LME tin. Support is seen at $19,000/mt for LME tin, while resistance is at $20,000/mt. The most traded SHFE September contract was 0.14% weaker at 145,500 yuan/mt overnight. Support is seen at 143,500 yuan/mt, while resistance is at the 20-day moving average as high as 146,200 yuan/mt.
