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SMM Morning Comments (Jun 10): LME base metals closed mixed before ECB meeting and US CPI release
Jun 10,2021 09:49CST
SMM Comments
Source:SMM
LME base metals closed mixed as the market was waiting for the European Central Bank policy meeting and the release of US CPI data. At the same time, SHFE metals mostly increased despite the national curb on commodity prices.

SHANGHAI, Jun 10 (SMM) – LME base metals closed mixed as the market was waiting for the European Central Bank policy meeting and the release of US CPI data. At the same time, SHFE metals mostly increased despite the national curb on commodity prices.

In SHFE market, copper rose 0.38%, aluminium contract increased 0.98%, lead gained 1.02%, zinc dropped 0.16%, tin went up 0.25%, and nickel won 0.41%

In LME market, copper dipped 0.44%, aluminium increased 0.08%, lead inched up 0.55%, zinc lost 0.17%, tin edged up 0.11%, and nickel gained 0.02%.

Copper: Three-month LME copper dipped 0.44% in the overnight trading to close at $9,971/mt, and is expected to trade between $9,940-10,020/mt today.

The most traded SHFE 2107 copper contract rose 0.38% last night to close at 71,780 yuan/mt, and is likely to trade between 71,300-71,900 yuan/mt today.

From the macro perspective, The Bank of Canada kept the key interest stable, and said it would maintain its current policy of quantitative easing. The nonfarm payroll data released last week continued to interfere the market. The strong inflation data intensified investors' concerns of Fed's tightening the policy, and copper futures fluctuated amid the cautious market sentiment. Today's focus will be the coming US consumer price index (CPI). Downstream spot purchase was maintained on rigid demand. The price spread between the front-month and next-month contracts made traders reluctant to lower premiums with the settlement only three days away. The stalemate may continue through the week. The spot premiums are likely to be seen between 50-120 yuan/mt.

Aluminium: Three-month LME aluminium increased 0.08% in the overnight trading to settle at $2,451.5/mt, and is likely to trade between $2,400-2,500/mt today.

The most active SHFE 2107 aluminium contract rose 0.98% to end at 18,555 yuan/mt last night amid the cautious sentiment. The July contract is expected to move between 18,300-18,650 yuan/mt today, with the premiums of aliminium ingot stable at 0-20 yuan/mt in east China.

Lead: Three-month LME lead inched up 0.55% to close at $2192.5/mt in the overnight trading. The bears reduced positions again, driving an increase on the third consecutive night. The US dollar rose slightly after the drop last night, weighing on the LME non-ferrous metals. LME lead is likely to test the line at $2,200/mt today amid bullish environment.

The most liquid SHFE 2107 lead contract gained 1.02% to end at 15,425 yuan/mt last night amid the cautious trade among bears and bulls, and is likely to move above the support line of the 20-day moving average.

Zinc: Three-month LME zinc lost 0.17% to settle at $3,012.5/mt in the overnight trading, with open interest decreasing 995 lots to 262,000 lots. LME zinc contract fell 700 mt or 0.26% to 169,650 mt last night. The market holds a wait-and-see stance, focusing on the European Central Bank’s policy meeting and the US CPI due today. LME zinc is expected to move between $2,970-3,020/mt today.

The most active SHFE 2107 zinc contract closed 0.16% lower at 22,545 yuan/mt last night. China’s surging PPI for May triggered the market worries of the falling prices. The margins were loose for mines, and smelters gradually resumed production, which increased the risk of weaker fundamentals. July contract is expected to trade between 22,300-22,800 yuan/mt today, and spot premiums for domestic 0# Shuangyan are likely to be seen between 90-100 yuan/mt over July contract.

Tin: Three-month LME tin edged up 0.11% to end at $31,270/mt in the overnight trading, with open interest increasing 164 lots to 12,077 lots, and is likely to trade between $30,000-31,000/mt.

The most traded SHFE 2107 tin contract went up 0.25% to settle at 208,110 yuan/mt last night, with open interest losing 39 lots to 29,612 lots. China’s National Development and Reform Commission strengthened the supervision to curb the over increase of commodity prices, which weighed on the tin prices. Tin contract is expected to fluctuate at high levels and trade between 205,500-210,000 yuan/mt.

Nickel: Three-month LME nickel gained 0.02% to close at $18,140/mt yesterday, with open interest losing 1,039 lots to 218,000 lots. LME nickel is expected to keep rising and test the previous high at $18,475/mt today.

The most liquid SHFE 2107 nickel contract won 0.41% in the overnight trading to settle at 132,420 yuan/mt, with open interest decreasing 6,800 lots to 123,000 lots. SHFE nickel is expected to fluctuate higher to test the previous high at 135,000 yuan/mt today.

Market commentary
Copper
Aluminium
Lead
Zinc
Tin
Nickel

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