SHANGHAI, May 31 (SMM) –
Copper: Three-month LME copper recovered some ground after it fell to an intraday low of $5,832.5/mt on Thursday, and it finished the trading day 0.56% lower at $5,858/mt. The most active SHFE July contract followed its LME counterpart to open lower overnight, and slipped to a low of 46,290 yuan/mt as shorts loaded up their positions. It lost 0.39% to close at 46,440 yuan/mt in overnight session. A copper delivery of 27,000 mt to LME-approved warehouses, a strong US dollar and a drop in crude prices weighed on copper prices. LME copper is expected to trade between $5,825-5,870/mt today, with SHFE copper at 46,100-46,600 yuan/mt. Spot premiums are seen firmer at 50-110 yuan/mt as thin trades on the last trading day of May will prompt sellers to hold offers firm.
Aluminium: A large delivery to LME-approved warehouses depressed three-month LME aluminium by 0.84% on Thursday, closing at $1,781/mt. LME aluminium inventories gained 27,400 mt on the day to 212,400 mt. LME aluminium is expected to trade rangebound at lows or try to regain some ground today, with most transactions at $1,780-1,800/mt. The most traded SHFE July contract fluctuated to close overnight 0.18% lower at 14,130 yuan/mt. Weaker consumption in some sectors and falling inventories offer downward and upward resistance. SHFE aluminium is expected to trade between 14,100-14,200 yuan/mt today, with spot premiums of up to 30 yuan/mt over the SHFE 1906 contract.
Zinc: As the greenback retreated from earlier highs, three-month LME zinc recovered from earlier losses to close 0.73% higher at $2,559/mt on Thursday. With falling LME zinc inventories and robust backwardation, near-term supply concerns will offer support to LME zinc. LME zinc is expected to trade between $2,535-2,585/mt today, and we will monitor resistance at the 10-day moving average. The most active SHFE July contract broke the 20-day moving average to a high of 20,860 yuan/mt overnight before it pared some gains to close at 20,765 yuan/mt, up 0.46%. The weak physical market grows concerns about momentum in SHFE zinc. We will monitor whether the SHFE 1907 contract can stand above the 20-day moving average today, and the contract is likely to trade between 20,550-21,050 yuan/mt.
Nickel: Three-month LME nickel rebounded from earlier lows of $12,000/mt to finish Thursday 0.46% higher at $12,095/mt. The most traded SHFE July contract climbed to a high of 99,200 yuan/mt overnight before pressure from the five-day moving average forced it to relinquish some gains to close at 98,550 yuan/mt, up 0.17%. LME nickel is expected to trade between $12,000-12,200/mt today, and SHFE nickel at 98,000-100,000 yuan/mt. Spot prices are seen at 98,200-99,000 yuan/mt.
Lead: Three-month LME lead fell below $1,800/mt to close 1.34% lower at $1,799/mt on Thursday. LME lead continued to hover at lows, without a clear direction. Macroeconomic uncertainty kept investors cautious, and accounted for light volume and tight trading ranges. LME lead is expected to remain rangebound in the short run. The most active SHFE July contract reversed earlier gains to close 0.19% lower at 16,080 yuan/mt overnight, as investors preferred to go short. SHFE lead is expected to continue to hover in a range, with pressure from the 20-day moving average.
Tin: Dragged by an increase in the US dollar, three-month LME tin tumbled to a low of $18,630/mt on Thursday before it rebounded to close marginally higher at $18,775/mt. Support is seen at $18,500/mt while resistance is at $19,000/mt. The most traded SHFE September contract regained some ground after falling to a low of 142,800 yuan/mt overnight. It finished overnight session 0.32% lower at 143,580 yuan/mt. It remained under all short-term moving averages. Support is seen at 143,000 yuan/mt while resistance is at 145,000 yuan/mt.
