SMM Evening Comments (May 29): Shanghai base metals mostly rose on Friday, copper rallied 1% 

SHANGHAI, May 29 (SMM) – SHFE nonferrous metals ended higher for the most part on Friday May 29, following after they closed mixed Thursday. The increases were capped on the backdrop of rising tensions between the US and China that threatens to hamper businesses.

Zinc recovered 1.71% to become the best performer. Copper advanced 0.73%, aluminium added 0.84%, tin rose 1.16%, while lead shed 0.42% and nickel declined 0.13%.

The ferrous complex also mostly climbed as iron ore surged 6.44%. Rebar grew 2.49% following the release of Tangshan’s June air pollution control draft plan. Hot-rolled coil increased 3.18%, coke gained 0.91%, while stainless steel eased 0.46%. 

The US unemployment benefits claims last week fell to the lowest level since the coronavirus crisis began, and this added to investors confidence in the global economic recovery. 

Crude oil futures slipped in early trades Friday as the market focused on US-China tensions after US President Donald Trump said late Thursday that he will announce new China policies on Friday.

Copper: The most-traded SHFE July contract climbed to a session high of 44,050 yuan/mt but it failed to hold steady above 44,000 yuan/mt, finishing the day 0.73% higher at 43,940 yuan/mt. Decreasing domestic inventories also supported prices of the red metal. With bullish signals from technical indicators, the contract may test the 44,000 yuan/mt level tonight. 

Aluminium: The most-liquid SHFE July contract extended increase from the previous day, as departing shorts sent it to a more than two-month high of 13,260 yuan/mt, before the contract ended the day 0.84% higher at 13,215 yuan/mt. This marked the sixth consecutive day of increase. Decreasing availability of spot products amid high consumption in the domestic market may support aluminium prices in the near term. 

Zinc: The most-active SHFE July contract continued to regain losses from earlier trades as it advanced in the afternoon session, hitting a high of 16,470 yuan/mt and ending up 1.71% on the day at 16,400 yuan/mt. New maintenance at smelters and falling domestic social inventories will likely see the contract testing pressure from the five-day moving average. 

Lead: The most-liquid SHFE July contract extended its decline from Thursday, falling 0.42% on the day to close at 14,220 yuan/mt. With support from its LME counterpart and the 10-day moving average, the contract may face limited downsides tonight. 

Tin: The most-liquid SHFE August contract climbed to an intraday high of 134,740 yuan/mt, as investors loaded up long positions, before it pared some gains and closed up 1.16% on the day at 134,420 yuan/mt. With support from the five-day moving average, the contract is expected to test pressure from 135,500 yuan/mt.