SHANGHAI, Jun 21 (SMM) — LME base metals closed mixed in the overnight trading last Friday, as the expanding inflation and rising US dollar weighed on the market, but short supply still supported the prices. SHFE metals basically went down.
In LME market, copper dipped 0.45%, aluminium gained 0.87%, lead rose 1.15%, zinc lost 1.65%, and tin fell 1.11%.
In SHFE market, copper slid 1.36%, aluminium dropped 0.7%, lead contract went up 2.13%, zinc decreased 2.69%, tin fell 2.02%, and nickel shed 0.78%.
Copper: Three-month LME copper dipped 0.45% to close at $9,149/mt in the overnight trading last Friday, and is expected to trade between $9,090-9,170/mt today.
The most liquid SHFE copper contract slid 1.36% to end at 66,910 yuan mt last Friday, and is expected to trade between 66,600-67,200 yuan/mt today.
At macro levels, the president of St Louis Fed expected that the rising inflation may urge Fed to raise interest rates next year. US stocks plummeted amid the hawkish signals, and US dollar index kept rising, suppressing copper prices. At fundamentals, LME stocks increased significantly last Friday, and bearish sentiments rose in the market, while cautious mood still weighed on copper prices. The transaction in morning spot market was active as downstream users increased purchases amid falling futures. Spot premiums are expected to move between 90-140 yuan/mt.
Aluminium: Three-month LME aluminium gained 0.87% to close at $2,385.5/mt in the overnight trading last Friday, with open interest up 2,756 lots to 700,000 lots, and is expected to trade between $2,370-2,400/mt today.
The most traded SHFE 2108 aluminium contract dropped 0.7% to settle at 18,330 yuan/mt last Friday night, with open interest increasing 7,575 lots to 184,000 lots, and is expected to trade between 18,200-18,500 yuan/mt.
Lead: Three-month LME lead rose 1.15% to end at $2,153/mt in last Friday’s overnight trading. The upward US dollar index weighed on base LME metals. LME lead stocks kept falling last Friday, supporting the LME lead. Today’s focus will be the support line at the 60-day moving average.
The most liquid SHFE lead contract went up 2.13% last Friday to close at 15,375 yuan/mt. Domestic lead ingot social inventories rose further, but the high-priced lead concentrate and battery scrap led to tighter lead ingot supply. Whether SHFE lead will test the pressure line at 15,400 yuan/mt is worth attention today.
Zinc: Three-month LME zinc lost 1.65% to end at $2,840/mt last Friday night, with open interest down 535 lots to 258,000 lots, and is expected to trade between $2,850-2,900/mt today. LME zinc stocks dropped 2,125 mt or 0.81% to 261,325 mt last Friday. Fed’s hawkish statement implied to raise the interest rates and end the emergency debt purchase plan earlier, which boosted US dollars and weighed on LME zinc. Short-term focus will be the macro guidance.
The most active SHFE 2107 zinc contract decreased 2.69% in the overnight trading last Friday to settle at 21,510 yuan/mt, with open interest up 899 lots to 77,254 lots. SHFE zinc was dragged down by the overseas market. The mine end saw loose margins recently, and the impact of the power curtailment in Yunnan was gradually relieved, so the rigid demand of galvanizing stood stable. Orders for die-casting declined slightly, providing limited support for the zinc fundamentals. The SHFE 2107 zinc contract is expected to trade between 21,400-21,900 yuan/mt today, and the premiums of 0# domestic Suangyan zinc are likely to be seen between 130-140 yuan/mt over the July contract.
Tin: Three-month LME tin closed 1.11% lower at $29,915/m in the overnight trading last Friday, with open interest down 13 lots to 11,861 lots. LME tin stocks increased 55 mt to 2,045 mt last Friday, which released the overseas inventory pressure, but the supply shortage extended, supporting tin prices. LME tin is expected to fluctuate widely under the impact of US dollar trends, and trade between $29,000-30,600/mt today.
The most traded SHFE 2108 tin contract fell 2.02% to end at 197,160 yuan/mt last Friday night, under the impact of overseas market and the policy control, with open interest decreasing 382 lots to 34,575 lots. Spot supply remained tight as the power curtailment in Yunnan was not fully lifted. The falling tin futures led to wider spot discounts, and tin prices were still supported by the resource shortage. The impact of macro news needs attention, and SHFE tin is expected to trade between 192,000-203,000 yuan/mt today.
Nickel: The most traded SHFE nickel shed 0.78% last Friday night to close at 127,300 yuan/mt, with open interest down 1,653 lots to 94,686 lots. SHFE nickel fell from high after the holiday under macro impact, but is likely to stop falling and stabilise around 127,000 yuan/mt. Meanwhile, spot premiums and discounts expanded significantly amid active trade. Steel mills started to purchase nickel plates for the high production, and nickel sulphate prices rose, driving up nickel briquette consumption. Market transaction strongly supported spot prices. The support line at 60-day moving average and the rebound trend will be the focuses this week.
