SHANGHAI, Jul 1 (SMM) – Shanghai base metals were mixed in the overnight trading, amid high US nonfarm payrolls and China’s firm PMI for June. Meanwhile, their counterparts on LME also ended mixed.
In SHFE market, copper increased 0.67% and zinc rose 0.98%, while lead dropped 0.97%, aluminium fell 0.21%, and nickel decreased 0.92%.
In LME market, copper rose 0.36% and zinc went up 0.92%, but lead dropped 1.05%, and aluminium fell 0.36%.
Copper: Three-month LME copper gained 0.36% to end at $9,380/mt on Wednesday, and is expected to trade between $9,360-9,450/mt today.
The most active SHFE 2108 copper concentrate increased 0.67% to end at 68,710 yuan/mt last night, and is expected to trade between 68,400-69,000 yuan/mt today, with spot premiums between 20-100 yuan/mt.
According to the data released last night, US ADP employment figure registered 692,000, higher than expected, which supported US dollar index to hit a new high in the past two and a half months. US dollar recorded the largest gain since November 2016, and copper futures declined. Market concerns of US Fed’s early reduction on QE also brought continuous pressure on copper prices. On the last day of June, buyers were waiting for chances to enter the market, while sellers were holding prices high amid limited resources. The price spread between the contracts of different months are likely to expand. Market trade is expected to recover in July, and the premiums are likely to rise.
Aluminium: Three-month LME aluminium decreased 0.36% to end at $2,523/mt on Wednesday, and is expected to trade between $2,500-2,550/mt today.
The most liquid SHFE contract edged down 0.21% to close at 18,790 yuan/mt last night, and is expected to trade between 18,600-19,000 yuan/mt today.
Lead: Three-month LME lead dropped 1.05% to close at $2,266.5/mt on Wednesday night, remaining volatile at high levels. Today’s focus will be whether LME lead will stop falling and stand around $2,250/mt.
The most traded SHFE 2108 lead contract fell 0.97% to end at 15,895 yuan/mt last night, dragged down by the overseas market, but supported by the line at 15,850 yuan/mt. China’s domestic lead trade was sluggish due to high prices, and social inventories are likely to increase amid traders’ enthusiasm for delivery. However, bulls still hold optimistic expectations over the market. Today’s focus will be the pressure line at 15,950 yuan/mt.
Zinc: Three-month LME zinc rose 0.92% to end at $2,973/mt on Wednesday, with open interest down 1,626 lots to 257,000 lots. LME zinc stocks fell 650 mt or 0.26% to 254,025 mt. US non-farm payrolls registered 692,000, and Fed reverse repo volume got close to $1 trillion for the first time. LME zinc rose driven by the looser liquidity, and is expected to trade between $2,930-2,980/mt today.
The most liquid SHFE 2108 zinc contract advanced 0.98% to close at 22,180 yuan/mt in the overnight trading, with open interest up 4,137 lots to 98,190 lots. Overseas market strengthened last night, and China’s PMI stood high, boosting the optimistic market sentiments. Meanwhile, US dollar surged, and the production restrictions in north China extended. Market trade was also sluggish. Cautious operations are suggested amid the mixed bullish and bearish factors. The August contract is expected to trade between 21,700-22,200 yuan/mt today, with the premiums of 0# domestic Shuangyan zinc between 140-150 yuan/mt over the July contract.
Tin: Three-month LME tin closed at $31,070/mt on Wednesday amid the tight supply, and is expected to trade between $30,500-31,700/mt today.
SHFE tin contract closed at 211,490 yuan/mt last night, and is expected to trade between 208,000-213,000 yuan/mt today.
Nickel: Three-month LME nickel fell $160/mt to $18,235/mt on Wednesday, and is expected to remain fluctuating. The game between bears and bulls is worth attention.
The most traded nickel contract dropped shed 0.92% to end at 135,180 yuan/mt on Wednesday night, with open interest down 4,800 lots to 135,000 lots. The support from 10-day moving average around 134,000 yuan/mt is worth attention.