SHANGHAI, Jun 28 (SMM) — Shanghai base metals traded mixed on Monday morning as official data showed that China's industrial profits for May slowed. Meanwhile, their counterparts on the LME rose for the most part amid the prospect of a steady economic rebound and fears of a tapering of monetary stimulus.
Shanghai base metals ended mostly higher in overnight trading. Aluminium increased 0.4%, tin rose 0.45%, nickel went up 0.62% and zinc strengthened 0.48%, while copper slid 0.12% and lead weakened 0.89%.
The LME complex performed similarly on Friday. Aluminium increased 2.23%, lead rose 0.61%, tin went up 0.33% and nickel strengthened 0.7%, while copper fell 0.24% and zinc weakened 0.19%.
Copper: Three-month LME copper fell 0.24% to end at $9,435/mt on last Friday, and is likely to trade between $9,425-9,505/mt today.
The most-active SHFE 2108 copper contract went down 0.12% to close at 68,620 yuan/mt in overnight trading, and it is expected to move between 68,600-69,200 yuan/mt today, while spot prices will be seen at premiums 20 yuan/mt – discounts 60 yuan/mt.
The US core PCE price index released on Friday increased by 3.4% year on year, the highest year-on-year growth rate since 1992, but the inflation data was in line with expectations, which slightly eased the market inflation sentiment. The US dollar index bottomed out on Friday and the pressure on copper futures dropped slightly.
Aluminium: Three-month LME aluminium rose 2.23% to close at $2,494.5/mt on Friday. It is expected to fluctuate between $2,440-2,500/mt today.
The most-liquid SHFE 2108 aluminium contract rose 0.4% to settle at 19,005 yuan/mt on Friday night, and is likely to trade bwteen 18,600-19,100 yuan/mt today.
Zinc: Three-month LME zinc fell 0.19% to close at $2,909.5/mt on last Friday. Zinc stocks at LME-listed warehouses fell 550 mt to 257,450 mt. The US core personal consumption expenditures (PCE) price index recorded the largest year-on-year increase in recent 30 years in May, but investors bet that the upward inflationary pressure will be temporary and the US economy will continue to recover. However, the worry that the Federal Reserve tightened monetary policy earlier than expected suppressed some optimism. The contract is likely to trade between $2,890-2,940/mt today.
The most-liquid SHFE 2108 zinc contract fell 0.18% to end at 21,865 yuan/mt in overnight trading. On fundamentals, domestic TC went up, and consumption in galvanising and die-casting sectors gradually weakened in the off-season of consumption, and the support for zinc prices weakened. However, social inventories decreased again, mainly because arrivals of smelters did not come in time after resuming production, and after social inventories were replenished, inventories piled up and zinc prices are expected to further decline. The SHFE zinc contract is expected to move between 21,500-22,000 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be seen higher at 140-150 yuan/mt.
Nickel: The most-active SHFE 2107 nickel contract rose 0.57% to close at 138,420 yuan/mt on last Friday. Three-month LME nickel rose 0.7% to close at $18,575/mt on last Friday. It is expected that nickel prices will post slower increase, and prices will consolidate at a high level this week.
Lead: Three-month LME lead settled 0.61% higher at $2,231.5/mt on last Friday. LME lead stocks continued to decline, and overseas consumption kept optimistic expectations. LME Lead rose for six consecutive days. Whether the contract could move above $2,240/mt will be monitored today.
The most-active SHFE 2108 lead contract went down 0.89% to close at 15,510 yuan/mt on Friday night. It is expected that the contract will continue to fluctuate at a high level, with great pressure to break through the first-line target of 15,700 yuan/mt. Whether the contract could stand firm above 15,500 yuan/mt will be monitored tonight.
Tin: Three-month LME tin closed up 0.33% at $30,850/mt on last Friday. The shortage of overseas supply supported the high-level operation of LME tin. The impact of recent macro changes on tin prices should be monitored, and it is expected that LME tin will run at a high level in the near term. Pressure above will be seen from $31,000/mt today. Support below will be seen from $30,200/mt today.
The most-liquid SHFE 2108 tin contract rose 0.45% at 210,850 yuan/mt on Friday night. Yunnan Tin Industry Co., Ltd. announced on last Thursday that it would stop production and optimize and improve its tin smelting production system. The shortage of supply supported the continuous rise of tin prices, amd the impact of domestic and foreign macro news on tin prices should be monitored. Pressure above will be seen from 215,000 yuan/mt today. Support below will be seen from 208,000 yuan/mt today.