SHANGHAI, Jun 3 (SMM) – Shanghai base metals mostly dropped last night, and LME metals closed mixed amid rising price pressure.
In SHFE market, copper fell 1.17%, aluminium edged down 1.12%, lead lost 0.23%, zinc slumped 0.3%, tin dropped 0.92%, and nickel added 0.2%.
In LME market, copper dropped 1.23%, aluminium fell 1.89%, lead dipped 0.09%, zinc gained 0.44%, and tin rose 0.52%.
Copper: Three-month LME copper dropped 1.23% to close at $10,113.5/mt in the overnight trading, and is expected to trade between $10,100-10,900/mt.
The most traded SHFE 2107 copper contract lost 1.17% to end at 72,820 yuan/mt last night, likely to trade between 72,800-73,400 yuan/mt today. Spots are expected to trade at premiums of 10-80 yuan/mt.
Fed's Beige Book survey showed that US economic recovery was accelerated in April and May, and the overall price pressure further increased. The market’s optimism about economic recovery was suppressed by inflation concerns, which dragged down the LME copper in the overnight trading. The recovery of US job market will be the focus this week. The spot market fluctuated frequently during the day on Wednesday, and most of the participants operated interdelivery spread. Premiums are expected to rise further as the settlement day approaches.
Aluminium: The most-liquid SHFE 2107 aluminium contract fell 1.12% to settle at 18,470 yuan/mt in the overnight trading, and is expected to trade between 18,350-18,800 yuan/mt today.
Yunnan’s aluminium plants under electricity curtailment have stopped the tanks. Before the shutdown, the molten aluminium has been taken out to cast ingots. The ingot arrivals in south China may be high in the short term. The consumption declined in Guangdong and other regions under power rationing or in pandemic, and the social inventories in south China is expected to increase slightly. The spots are likely to be offered between a discount of 30 yuan/mt and a premium of 210 yuan/mt over June contract.
Three-month LME aluminium lost 1.89% to settle at $2,435/mt in the overnight trading, and is expected to trade between $2,430-2,490/mt today.
Lead: Three-month LME lead edged down 0.09% to close at $2,206.5/mt in the overnight trading, likely to test the support line at $2,200/mt today. US dollar rose and fell back last night, weighing on the LME nonferrous metals. LME lead stocks decreased over 2,000 mt.
The most traded SHFE lead dipped 0.23% to settle at 15,380 yuan/mt last night, and is likely to trade under the pressure line at 15,500 yuan/mt.
Zinc: Three-month LME zinc gained 0.44% to settle at $3,078/mt last night, with open interest increasing 2,904 lots to 271,000 lots. Zinc stocks across LME-listed warehouses dropped by 5,525 mt or 1.96% to 276,025 mt. The weak US dollar provided basic support for the Zinc trade. The faster economic recovery boosted the market sentiment, while the rising price pressures and expectations of narrowing bond purchase scale limited the price increase. LME zinc is expected to fluctuate between $3,050-3,100/mt today.
The most-liquid SHFE 2107 zinc contract slumped 0.3% to settle at 22,960 yuan/mt in overnight trading. Traders mainly shipped long orders at high prices as SHFE zinc surged and fell back. The bulk order market was less willing to receive goods. The short-term supply of zinc is limited, and zinc prices are expected to fluctuate at high levels, likely to weaken after the medium-term supply is released. The July contract is likely to move between 22,500-23,000 yuan/mt today, and spot premiums for domestic 0# Shuangyan will be seen at 80-90 yuan/mt against the July contract.
Tin: Three month LME Tin closed 0.52% higher at $30,950/mt in the overnight trading, with open interest increasing 235 lots to 11,781 lots. LME Tin is likely to trade between $29,800-31,000/mt today with the support of tight overseas supply.
The most liquid SHFE 2107 lead contract dropped 0.92% to close at 205,370 yuan/mt, and is likely to trade between 197,000-210,000 yuan/mt today amid the macro control and short supply in Yunnan due to the power curtailment.
Nickel: The most-active SHFE 2107 nickel contract added 0.2% to close at 133,320 yuan/mt in overnight trading, with open interest rising 8,380 lots to 138,000 lots.
Investors operated high throwing and bargain hunting overnight amid the long-short game, and the back structure of near month contracts extended. Fundamentals remained stable, but the expectation of an increase in deliverable products weakened the long-term forecast, and the concerns of the high production of stainless steel also affected the long-term sentiment of nickel futures.
The market will pay attention to the high-level consolidation of nickel futures today.
