SHANGHAI, Jun 8 (SMM) – Base metals closed mixed in the overnight trading, after Fed reverse repurchase hit a record high and US dollar edged down. Meanwhile, SHFE metals all rose.
In the SHFE market, copper won 0.38%, aluminium inched up 0.05%, lead contract rose 0.23%, zinc contract increased 0.78%, tin contract went up 0.5%, and nickel gained 0.05%.
In LME market, copper dipped 0.1%, aluminium edged down 1.41%, lead gained 1.31%, zinc closed 0.55% higher, tin lost 0.54%, and nickel increased 0.03%.
Copper: Three-month LME copper dipped 0.1% in the overnight trading to close at $9,950/mt, and is likely to trade between $9,900-9,980/mt today.
The most traded SHFE 2107 copper contract won 0.38% to settle at 71,660 yuan/mt last night, and is expected to trade between 71,400-72,000 yuan/mt today.
Fed’s reverse repurchase hit a record high over $486 billion last night, while US dollar weakened under pressure, driving copper futures to fluctuate higher. The market is waiting for the US inflation data. Spot social inventories kept falling for three weeks, and holders held prices high last week. However, traders are more willing to sell amid the narrowing price spread between the SHFE front-month and next-month contract, and premiums are trending lower from high levels. Premiums are expected to stand stable around 100 yuan/mt near the settlement day. Spots are expected to trade at premiums between 70-150 yuan/mt.
Aluminium: Three-month LME aluminium edged down 1.41% to close at $2,420.5/mt last night, and is likely to trade between $2,410-2,460/mt today as the lower US dollar supports commodity prices.
The most liquid SHFE 2107 aluminium contract inched up 0.05% last night to settle at 18,470 yuan/mt, and is expected to trade between 18,300-18,600 yuan/mt today. The fundamental consumption is in the peak season, and domestic social inventories kept falling amid the power curtailment in some regions. Spots are traded at small premiums over June contract.
Lead: Three month LME lead gained 1.31% to close at $2,164/mt in the overnight trading amid the weaker US dollar, and bears lightened positions to avoid risks. The focus today will be whether LME lead can maintain the upward trend and stabilise at $2,160/mt.
The most liquid SHFE 2107 lead contract rose 0.23% last night to close at 15,025 yuan/mt. Bulls probed the market and drove SHFE lead back over 15,000 yuan/mt. Domestic lead ingot social inventories kept increasing on Monday, weighing on the future prices. Attention needs to be paid to the support from the lower BOLL rail today.
Zinc: Three month LME zinc closed 0.55% higher at $3,020.5/mt in the overnight trading, with open interest losing 5,334 lots to 264,000 lots, and is expected to trade between $3,000-3,050/mt today. LME zinc stocks decreased 2,450 mt or 0.89% to 272,100 mt. US dollar weakened last. The job increase was not strong. Fed’s reverse repurchase hit a record high last night, and the expectation of the loose monetary policy will not strengthen. The short-term focus will be US inflation data.
The most active SHFE 2107 zinc contract increased 0.78% to settle at 25,695 yuan/mt in the overnight trading, with open interest increasing 3,651 lots to 93,266 lots. SHFE zinc fluctuated at high levels driven by the LME market. SMM TCs continued to decline, and zinc inventories kept falling on the week. The purchase was flat on the rigid demand. Zinc prices are expected to remain volatile. The July contract is expected to move between 22,300-22,800 yuan/mt today, and spot premiums for domestic 0# Shuangyan are likely to be seen between 90-100 yuan/mt.
Tin: Three-month LME tin lost 0.54% to close at $30,635/mt in the overnight trading, with open interest decreasing 221 lots to 12,069 lots. LME tin stocks kept rising to 1,920 mt. China increased exports to alleviate the overseas supply shortage, but the spot premiums remain high, indicating a tight supply. LME tin is expected to trade between $30,000-31,000/mt today.
The most traded SHFE 2107 tin contract went up 0.5% to close at 204,440 yuan/mt last night, with open interest losing 198 lots to 27,273 lots. Rainy season appeared in Yunnan recently, but the power curtailment is not completely lifted, and the short supply supports the tin prices. SHFE tin is expected to trade between 200,000-210,000 yuan/mt.
Nickel: Three-month LME nickel rose 0.03% to close at $17,935/mt yesterday, with open interest increasing 718 lots to 219,000 lots. LME nickel is expected to test the $18,000/mt today.
The most active SHFE 2107 nickel contract gained 0.05% to close at 131,720 yuan/mt in the overnight trading, with open interest decreasing 1,932 lots to 116,000 lots, likely to test the pressure line at 132,000 yuan/mt.
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