US CPI far exceeded market expectations, triggering market concerns that the US will tighten liquidity ahead of schedule. As a result, the US dollar index stopped falling and rebounded. The decline in the US dollar index is likely to be limited, weighing on copper prices in the short term. Informal financing in China fell short of expectations in April

Social inventory of lead ingots increased by about 20,000 mt to 87,400 mt last week as smelters were willing to deliver goods with the approaching of settlement day. The inventory reach a new high since 2018, bring high pressure to the supply side.

The SHFE/LME copper price ratio fell to a three-year low last week as LME copper outperformed SHFE copper prices, expanding import losses. Some smelters have begun to export as export profit occurred. With increased reverse arbitrage operations and exports, SHFE copper prices are expected to strengthen this week.

Social inventory of lead ingots continued to rise to more than 70,000 mt, further weighing on lead prices. The production of primary lead smelters was stable, and the inventory of finished products decreased on the month as some smelters delivered spots.

Copper prices fell before rising last week, dipping to 65,700 yuan/mt early in the week. As the US dollar index fell to 91.5, copper prices exceeded 69,000 yuan/mt.

At the economic work conference (Two Sessions), China emphasised the "stability" of macroeconomic policies and the strengthening of regulations of raw materials markets to ease the cost pressure of enterprises. That depressed market bullishness. US President Biden officially announced a package of over $2 trillion in infrastructure and economic stimulus, aiming at optimising the development of infrastructure, manufacturing and the Internet. US Treasury yields are expected to surge to high levels amid economic recovery in the US from the COVID-19. The US dollar index is expected to remain in an upward track. Copper prices are expected to meet strong resistance from 68,000 yuan/mt.

Annualised sales of existing and new homes in the United States in February are due this week. The UK and other European regions will also release the CPI data in February and the flash value of the manufacturing PMI in March. Copper prices still have strong support from 65,300 yuan/mt and are unlikely to fall below this level in the short term.

SHFE copper contract prices are expected to move rangebound between 65,800-67,800 yuan/mt this week, and LME copper prices will fluctuate between $8,850-9,150/mt.

Copper prices have surged recently, posting an eight-day winning streak. The most-traded SHFE 2104 copper contract rose by the daily trading limit to 67,370 yuan/mt on Monday February 22, and this was 18.5% higher than the lowest price on February 3.

China will slash import tariffs on certain vehicles and auto parts down to 15%, the Ministry of Finance (MOF) said on Tuesday May 22. Cuts will take effect on July 1