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SMM Morning Comments (Jul 2): Shanghai base metals were mostly lower as investors looked ahead to US jobs report
Jul 2,2021 10:00CST
SMM Comments
Source:SMM
Shanghai base metals declined across the board on Friday morning as investors looked ahead to a closely-watched US jobs report set to be released later. Meanwhile, their counterparts on the LME were mostly lower on the board.

SHANGHAI, Jul 2 (SMM) — Shanghai base metals declined across the board on Friday morning as investors looked ahead to a closely-watched US jobs report set to be released later. Meanwhile, their counterparts on the LME were mostly lower on the board.

Shanghai base metals ended mostly lower in overnight trading. Copper edged down 0.57%, lead shed 0.06%, zinc fell 0.81% and tin lost 0.03%, while nickel climbed 0.51% and aluminium added 0.08%.

The LME complex performed similarly on Thursday. Zinc plunged 1.31% to lead the losses, copper fell 1.18%, lead weakened 0.46%, aluminium dropped 0.55% and nickel slid 0.77%, while tin rose 0.74%.

Copper: Three-month LME copper fell 1.18% to end at $9,269/mt on Thursday, and is likely to trade between $9,220-9,310/mt today.

The most-active SHFE 2108 copper contract went down 1.24% to close at 67,870 yuan/mt in overnight trading, and it is expected to move between 67,600-68,200 yuan/mt today, while spot premiums will be seen at 50-120 yuan/mt.

Overnight, the number of initial jobless claims as of June 26 in the US stood at 364,000, which was the lowest since March 14 last year. ISM manufacturing activity index of the US came in at 60.6 in June. Although it declined month on month, the output continued to rise. The steady performance of manufacturing data and the continuously restored labor market triggered the market's speculation that the Federal Reserve would speed up the tightening of liquidity. The US dollar index once again surged to a new high of nearly three months, and the copper futures fell under pressure at night.

Aluminium: Three-month LME aluminium fell 0.55% to close at $2,509/mt on Thursday. It is expected to trade between $2,500-2,550/mt today.

The most-liquid SHFE 2108 aluminium contract rose 0.08% to settle at 18,630 yuan/mt on Thursday night, and is expected to trade between 18,500-19,000 yuan/mt today.

Zinc: Three-month LME zinc fell 1.31% to close at $2934/mt on Thursday. Zinc stocks at LME-listed warehouses fell 542 mt to 256,000 mt. Overnight, the strengthening of the US dollar pressured the trend of LME zinc. The number of initial jobless claims in the US last week hit a new low since mid-March last year, but the manufacturing PMI fell short of expectations, and the weak data of China's manufacturing PMI in June also suppressed market sentiment. The nonfarm data to be released will be monitored in the near term. The contract is likely to trade between $2,910-2,960/mt today.

The most-liquid SHFE 2108 zinc contract fell 0.74% to end at 22,000 yuan/mt in overnight trading. Overnight, zinc prices were running at a high level, and the downstream operating rates continued to weaken. The spot market turnover was tepid, and social inventories were likely to pile up with weak support from the fundamentals to zinc prices. Macro guidelines will be monitored in the near term. The SHFE zinc contract is expected to move between 21,600-22,100 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be seen higher at 140-150 yuan/mt.

Nickel: The most-active SHFE 2108 nickel contract rose 0.51% to close at 134,780 yuan/mt on Thursday. Open interests fell 7,352 lots to 126,000 lots. The overall trend of the contract was weak this week, but there are no obvious negative factors in the market, and the demand of stainless steel and new energy still supported nickel prices to some extent. It is expected that the contract will have limited downward space, and will still keep fluctuating rangebound in the future.

Lead: Three-month LME lead settled 0.46% lower at $2256/mt on Thursday. Overnight, the US dollar index first fell and then rose, and LME Lead continued to fall back under pressure and decreased for two consecutive days, but LME lead stocks continued to fall slightly, which may give LME Lead support to continue to fluctuate at a high level. The contract will test support from five-day moving average.

The most-active SHFE 2108 lead contract went down 0.06% to close at 15,705 yuan/mt on Thursday night. After lead prices rose, there was a strong wait-and-see sentiment in the domestic effect market with the expectation of increasing stocks. Whether the contract could stop falling and stand firm above the five-day moving average should be monitored today.

Tin: Three-month LME tin closed up 0.74% at $31,300/mt on Thursday. On fundamentals, overseas supply was still tight, and it is expected that the contract will run strongly at high in the near term. Support below will be seen from $30,500/mt today. Pressure above will be seen from $31,700/mt today.

The most-liquid SHFE 2108 tin contract fell 0.03% to end at 211,730 yuan/mt on Thursday night. Pressure above will be seen from 213,000 yuan/mt today. Support below will be seen from 208,000 yuan/mt today.

Market commentary
Copper
Aluminium
Zinc
Nickel
Lead
Tin

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