SHANGHAI, May 27 (SMM) – Most SHFE nonferrous metals failed to extend their increases from early trades and closed lower on Wednesday May 17, on the backdrop of intensified worries about US-China tensions.
Zinc was the worst performer with a drop of 1.53%. Copper shed 0.37%, lead fell 0.28%, nickel slipped 1.04%, while aluminium added 0.85% and tin climbed 0.62%.
The ferrous complex also ended lower for the most part as iron ore shed 0.07%, rebar lost 0.23%, stainless steel decreased 0.83%, coke fell 0.43%, while hot-rolled coil gained 0.18%. SMM expects steel prices to remain supported in the near term as purchases from construction sites will further expand in June.
Crude oil futures fell on Wednesday as participants trimmed their positions on concerns about the strength of demand recovery even as more countries are easing coronavirus lockdowns.
The Chinese yuan fell to its lowest level in more than eight months after a media report that Beijing planned to expand the scope of its security legislation.
Copper: The most-traded SHFE July contract relinquished gains from the previous two sessions as escalated China-US tension again weighed on investors sentiment. The contract stabilised around 43,870 yuan/mt before it fell steeply to an intraday low of 43,500 yuan/mt and finished the day 0.37% lower at 43,640 yuan/mt. It has fallen below the five-day moving average but support remained from the 10-day moving average. Support from 43,500 yuan/mt will be monitored tonight.
Aluminium: The most-liquid SHFE July contract gained for the fourth consecutive day, recovering losses from the past 40 days as departing shorts sent it to a session high of 13,040 yuan/mt and settled it 0.85% higher on the day at 13,015 yuan/mt. Further upward potential could be limited tonight.
Zinc: The most-active SHFE July contract extended a downward trend amid exiting longs, ending the day 1.53% lower at 16,075 yuan/mt, with open interest down 522 lots. Resistance from the 10-day moving average depressed upward momentum of the contract. Decreasing downstream orders reinforced concerns about supply pressure. Support from 16,000 yuan/mt and pressure from the 20-day moving average will be monitored tonight.
Lead: The most-active SHFE July contract stemmed decline at 14,155 yuan/mt given support from the five-day moving average, closing the day 0.28% lower at 14,260 yuan/mt. Some bullish positions could underpin prices tonight.
Tin: The most-liquid SHFE July contract pulled back after it hovered above the daily moving average and hit a session high of 134,930 yuan/mt. It ended up 0.62% on the day at 134,100 yuan/mt, with pressure above expected from 136,000 yuan/mt.
