SMM Evening Comments (Jun 10): Shanghai nonferrous metals declined for the most part, lead climbed 0.98%

SHANGHAI, Jun 10 (SMM) – SHFE nonferrous metals broadly fell on Thursday June 10, as investors looked ahead to an upcoming release of US inflation data for May.

Zinc dropped 0.8% to lead the losses, copper shed 0.45%, tin declined 0.07%, and nickel fell 0.58%, while aluminium advanced 0.35% and lead climbed 0.98%.

The ferrous complex rose across the board. Iron ore increased 0.68%, rebar rose 2.68%, and hot-rolled coil climbed 2.25%.

Copper: The most-traded SHFE 2107 copper contract finished the day 0.45% lower at 71,290 yuan/mt. Open interest rose 1,535 lots to 132,479 lots.

Aluminium: The most-liquid SHFE 2107 aluminium contract finished the day 0.35% higher at 18,440 yuan/mt. Open interest fell 4,901 lots to 186,440 lots. The contract is expected to trade between 18,100-18,500 yuan/mt.

Zinc: The most-active SHFE 2107 zinc contract closed down 0.8% at 22,400 yuan/mt. Open interest fell 4,119 lots to 88,682 lots. The negotiation between US President Biden and the Republican Party on infrastructure bill has broken down, while the bipartisan group in the US House of Representatives announced an eight-year infrastructure plan with a scale of $1.25 trillion, breaking the deadlock. Although the impact of this plan remains to be seen, the eight-year plan may be difficult to change the current macro relationship between supply and demand. On fundamentals, the situation of weak supply and demand remains unchanged in China at present. However, due to the recovery of the production capacity of some smelters, arrivals increased, and the problem of market supply shortage was alleviated. Downstream restocked at low prices, and the market tended to be active. From this point of view, the situation that both supply and demand are suppressed may lead to the fast decline in zinc prices.

Nickel: The most-traded SHFE 2107 nickel contract ended the day 0.58% lower at 131,110 yuan/mt today. Open interest fell 14,774 lots to 114,647 lots.

Lead: The most-traded SHFE 2107 lead contract ended the day 0.98% higher at 15,420 yuan/mt. Open interest fell 4,921 lots to 58,120 lots. The contract will test support from 30-day moving average and 15,400 yuan/mt tonight.

Tin: The most-liquid SHFE 2107 tin contract fell to a session low of 206,520 yuan/mt and finished the day 0.22% lower at 207,150 yuan/mt today. Open interest fell 1,271 lots to 28,380 lots. According to foreign news on June 9th, the production of MSC in Malaysian smelter was interrupted due to the COVID-19, which affected the tin products delivered by the company to customers, and the supply in overseas markets was still affected by the pandemic, which supported the strong trend of LME tin. Domestic macro-control and gradual easing of power curtailment inhibited the rise of SHFE tin. The guidance of LME tin trend on the trend of SHFE tin will be monitored. Pressure above will be seen from 210,000 yuan/mt today. Support below will be seen from 205,500 yuan/mt today.