SHANGHAI, May 28 (SMM) — Shanghai base metals all cruised higher on Friday morning after a key US jobs report signaled a further recovery in the labor market. Meanwhile, their counterparts on the LME were mostly higher on the board.
Shanghai base metals all closed higher in overnight trading. Copper rose 3.05%, zinc surged 1.1%, aluminium added 1.11%, nickel jumped 3.98%, lead advanced 1.11% and tin went up 4.97%.
The LME complex performed similarly on Thursday. Copper rose 3.37%, aluminium increased 3.02%, zinc went up 2.77%, lead added 0.8%, nickel jumped 4.19% and tin gained 1.58%.
Copper: Three-month LME copper rose 3.37% to end at $10,293.5/mt on Thursday, and is likely to trade between $10,260-10,350/mt today.
The most-active SHFE 2107 copper contract went up 2.79% to close at 73,950 yuan/mt in overnight trading, and it is expected to move between 73,800-74,400 yuan/mt today, while spot premiums will be seen at 150-80 yuan/mt.
Last night, the number of initial jobless claims in the United States stood at 406,000, which fell for the fourth consecutive week and was the lowest since the outbreak of the pandemic, indicating that the recovery of the labor market continued to advance; In addition, the Biden administration proposed a budget of 6 trillion US dollars to boost market sentiment. On the fundamental side, labor strikes may occur in Escondida and Spence copper mines in Chile, and potential supply concerns will boost copper prices.
Aluminium: Three-month LME aluminium rose 3.02% to close at $2,486.5/mt on Thursday. It is expected to trade between $2,460-2,500/mt today. On the macro level, the US economy continued to recover, employment data improved, and the market tightened the liquidity of the Fed. Domestic high-level officials have repeatedly stressed that bulk commodities do not have the basis for sustained rise, and have conducted research on many varieties. On fundamentals, aluminium prices were adjusted sideways recently, and the domestic downstream consumption of aluminium was still in the peak season. Social inventories of aluminium kept falling, and some production capacity of aluminium enterprises in Yunnan was limited due to power shortage. Yesterday, there was a situation of limited production of aluminium in Guangxi, with no hope of increment on the supply side. The support from downstream consumption stimulated bulls to pull up. It is expected that the contract will trade strongly today.
The most-liquid SHFE 2107 aluminium contract rose 2.36% to settle at 18,935 yuan/mt on Thursday night, and is expected to trade between 18,500-19,000 yuan/mt today.
Zinc: Three-month LME zinc rose 2.77% to close at $3062.5/mt on Thursday. Zinc stocks at LME-listed warehouses fell 400 mt to 286,425 mt. The number of initial jobless claims last week in the US hit a new low since the outbreak, with strong GDP and labor market data. Biden proposed a 6 trillion US dollar infrastructure budget, and US Treasury Secretary Yellen called for more spending, stressing that inflation was temporary, boosting overall market sentiment. The contract is likely to trade between $3,020-3,070/mt today.
The most-liquid SHFE 2107 zinc contract rose 2.1% to end at 22,880 yuan/mt in overnight trading. The contract traded strongly, and the profit data of domestic industrial enterprises above designated size improved. Ferrous metals also stopped falling, which boosted market sentiment. The SHFE zinc contract is expected to move between 22,500-23,000 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be seen higher at 70-80 yuan/mt.
Nickel: The most-active SHFE 2107 nickel contract rose 3.98% to close at 131,210 yuan/mt on Thursday. Open interests rose 6,741 lots to 121,000 lots. Inflation expectations continued, the support of fundamentals remained, and nickels price rose sharply again at night. However, due to the recent state control over the blind rise of raw materials, it is still necessary to be wary of the fluctuation after the sharp rise again.
Lead: Three-month LME lead settled 0.8% higher at $2205.5/mt on Thursday. Overnight, the US dollar index continued to fluctuate weakly, the inventories of LME lead kept decreasing, and the bulls of LME lead increased their positions again. Whether the contract could continue the bull market and stand firm above $2,200/mt will be monitored today.
The most-active SHFE 2107 lead contract went up 1.11% to close at 15,525 yuan/mt on Thursday night. The impact of the change of lead spot market discount on the market will be monitored today. The contract will test support from 15,550 yuan/mt today.
Tin: Three-month LME tin closed up 1.58% at $30,230/mt on Thursday. Biden planned to propose a $6 trillion infrastructure budget. According to foreign sources, the earthquake in Goma, the eastern city of the Democratic Republic of the Congo, delayed the export of tin ore in North Kivu province, which is rich in minerals. The export of tin from Congo accounts for about 8% of the global tin concentrate production. At present, pressure above is seen from $30,500/mt, and if it is broken through, pressure above will be seen from $31,000/mt. Support below will be seen from $29,700/mt today. Supported by supply shortage and loose monetary expectation, the contract will maintain a strong trend in the near term.
The most-liquid SHFE 2107 tin contract rose 4.71% to end at 208,220 yuan/mt on Thursday night. It is expected that the contract will trade strongly in the near term. Pressure above will be seen from 210,000 yuan/mt today. Support below will be seen from 196,000 yuan/mt today.
