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SMM Morning Comments (May 26): Shanghai base metals were mostly higher after a recent Wall Street rally stalled overnight stateside
May 26,2021 10:00CST
Source:SMM
Shanghai base metals were mostly higher on Wednesday morning as easing inflation fears lifted market sentiment worldwide. Meanwhile, their counterparts on the LME also rose for the most part.

SHANGHAI, May 26 (SMM) — Shanghai base metals were mostly higher on Wednesday morning as easing inflation fears lifted market sentiment worldwide. Meanwhile, their counterparts on the LME also rose for the most part.

Shanghai base metals mostly advanced in overnight trading. Lead increased 0.29%, tin rose 0.42%, nickel went up 0.04%, aluminium added 0.14% and zinc strengthened 0.94%, while copper slid 0.77%.

The LME complex ended mostly lower on Tuesday. Copper decreased 0.48%, nickel fell 0.35%, weakened 1.36%, aluminium lost 0.19% and tin slid 0.02%, while lead went up 1.08% and zinc rose 1.15%.

Copper: Three-month LME copper fell 0.48% to end at $9,935/mt on Tuesday, and is likely to trade between $9,950-10,030/mt today.

The most-active SHFE 2107 copper contract went down 0.62% to close at 71,780 yuan/mt in overnight trading, and it is expected to move between 71,800-72,500 yuan/mt today, while spot premiums will be seen at 150-50 yuan/mt.

Overnight economic data showed that the new home sales in the US after the seasonal adjustment in April stood at 863,000, which was far below market expectations. In addition, the US consumer confidence index declined for the first time in May this year, and inflation signals aggravated market worries.

Aluminium: Three-month LME aluminium fell 0.19% to close at $2,385.5/mt on Tuesday. According to the data released by LME, LME aluminium inventories continued to fall since late March. As of Tuesday afternoon, LME aluminium inventories stood at 1,733,775 mt, the lowest in two and a half months. The contract is expected to trade between $2,350-2,410/mt today.

The most-liquid SHFE 2107 aluminium contract rose 0.14% to settle at 18,335 yuan/mt on Tuesday night, and is likely to trade between 18,000-18,500 yuan/mt today. Recently, the domestic government has repeatedly emphasized the stability of the bulk commodity market, but the domestic electrolytic aluminum is unable to reach its production due to energy consumption and power problems, and the increase in supply is slow. The domestic aluminium demand is still in the peak season, and aluminium prices may keep fluctuating.

Zinc: Three-month LME zinc rose 1.15% to close at $2,982/mt on Tuesday. Zinc stocks at LME-listed warehouses fell 700 mt to 287,725 mt. The US dollar index and US bond yields declined, and US consumer confidence and housing data showed signs of increasing inflation. The vice chairman of the Federal Reserve played down inflation worries, and the market sentiment warmed up. The contract is likely to trade between $2,950-3,000/mt today.

The most-liquid SHFE 2107 zinc contract rose 0.94% to end at 22,475 yuan/mt in overnight trading. Under the macro-control of commodities, the upside space of zinc prices is expected to be limited. The SHFE zinc contract is expected to move between 22,200-22,700 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be 80-120 yuan/mt.

Nickel: The most-active SHFE 2107 nickel contract rose 0.22% to close at 125,490 yuan/mt on Tuesday. Open interests rose 1,265 lots to 116,000 lots. Under the overall macro sentiment, the upward pressure still should be monitored.

Lead: Three-month LME lead settled 1.1% higher at $2,162.5/mt on Tuesday. The contract will test support from $2,100/mt today.

The most-active SHFE 2107 lead contract went up 0.29% to close at 15,380 yuan/mt on Tuesday night. The contract will test support from 40-day moving average at 15,300 yuan/mt today.

Tin: Three-month LME tin closed down 0.02% at $29,530/mt on Tuesday. The contract is in a high fluctuation trend, and the impact of recent macro sentiment on commodity trends should be monitored. The supply shortage still supported tin prices. Pressure above will be seen from $30,500/mt today. Support below will be seen from $29,000/mt today.

The most-liquid SHFE 2107 tin contract fell 0.17% to close at 196,610 yuan/mt on Tuesday night. The contract is expected to keep fluctuating in the near term. Pressure above will be seen from 200,000 yuan/mt today. Support below will be seen from 193,000 yuan/mt today.

Market commentary
Copper
Aluminium
Zinc
Nickel
Lead
Tin

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