SHANGHAI, Jul 2 (SMM) –
Copper: LME copper met resistance at the five-day moving average last Friday night with support at $6,600/mt as final labour negotiation is expected in July at the world's largest copper mine, Escondida, in Chile. Trading range is set to be $6,590-6,640/mt today with the SHFE 1808 contract at 51,000-51,500 yuan/mt amid slack season. Spot discounts are expected to be narrower to 180-140 yuan/mt today.
Aluminium: LME aluminium broke the support at $2,150/mt and dipped to a low of $2,130/mt last Friday night as most base metals traded weakly. However, it is likely to cease the downward trend today due to expectations of strong purchasing managers’ index (PMI) from several countries. Trading range today is expected at $2,122-2,150/mt. The SHFE 1808 contract is likely to test support at 14,000 yuan/mt as it was depressed to a low of 14,045 yuan/mt last Friday night with increasing short positions. As domestic inventory declined slower and consumption weakened on the month, the contract is seen trading at 14,000-14,200 yuan/mt today with spot discount at 80-40 yuan/mt.
Zinc: LME zinc fell last Friday and lost some gains made in the previous days. With strong resistance at the $2,900/mt level, we expect it to trade at $2,840-2,890/mt today. The weak LME zinc dragged its SHFE counterpart down to close at 23,045 yuan/mt last Friday. But the 1808 zinc contract saw support from the shrinking inventory across Shanghai, Guangdong and Tianjin. It is likely to consolidate at 22,900-23,350 yuan/mt today.
Nickel: LME nickel rose and broke the $15,000/mt level last Friday, while the SHFE 1809 contract traded at 116,400-117,600 yuan/mt and above several moving averages. We expect LME nickel to trade at $14,900-15,000/mt today with the SHFE 1809 contract at 117,200-118,000 yuan/mt. Spot prices are seen at 117,400-118,200 yuan/mt.
Lead: LME lead will face continued pressure from shorts today as it was dragged down for four consecutive trading days. Last Friday night, it was depressed to close at $2,409/mt after rising to a high of $2,443/mt. The SHFE 1808 contract also traded weakly and closed at a low of 20,370 yuan/mt. We see it testing support at the five-day moving average today.
Tin: LME tin inched up to close at $19,675/mt last Friday night but with pressure at $20,000/mt due to rising inventory. Support is seen at $19,300/mt today. The SHFE 1809 contract gained 850 yuan/mt to close above the five-day moving average, but we see limited upward momentum due to its weak LME counterpart. Pressure is seen at 145,500 yuan/mt.