SHANGHAI, Jun 28 (SMM) –
Copper: The SHFE 1808 contract hit 52,050 yuan/mt overnight but pressure was seen at the 250-day moving average. While the falling Chinese yuan may provide some support, the hawkish views on US inflation would weigh on copper prices. The KDJ indicator suggested that copper prices are likely to stabilise if the trade situation does not deteriorate. We expect LME copper to trade at $6,670-6,730/mt today with the SHFE 1808 contract at 51,500-52,500 yuan/mt. Spot discounts are seen at 200-150 yuan/mt.
Aluminium: LME aluminium rebounded overnight as the US softened its approach to investment restrictions on China. We see its weak trading pattern unchanged and expect it to trade at $2,160-2,200/mt today. The SHFE 1808 contract rose overnight and hit a high of 14,305 yuan/mt. It is likely to trade at 14,200-14,400 yuan/mt today with spot discounts at 100-60 yuan/mt.
Zinc: LME zinc rose to $2,924/mt last night following Trump’s decision to take a softer approach to curb Chinese tech investment. It then lost some gains as some longs took profits. We see resistance at the $2,900/mt level and expect it to consolidate at $2,865-2,915/mt today. The SHFE 1808 contract managed to stand firmly at the five-day moving average and found support overnight. As its MACD lines further converged below the zero line and given the strong resistance at the 23,500 yuan/mt level, we expect the contract to trade at 23,000-23,500 yuan/mt today.
Nickel: LME nickel surged to a high of $15,020/mt overnight but inched down from the previous day to close at $14,865/mt with pressure from the five- and 10-day moving averages. The SHFE 1809 contract climbed up and moved away from the daily moving average last night, touching a high of 116,990 yuan/mt with resistance at 117,000 yuan/mt. We see the contract trading at 114,700-116,700 yuan/mt today with spot price at 114,700-116,200 yuan/mt.
Lead: LME lead jumped to a high of $2,449/mt last night after Trump backed softer restrictions on Chinese investment. With strong support at the $2,400/mt level, it is likely to test the pressure at the $2,450/mt level today. The SHFE 1808 contract hovered around the daily moving average during the night session after it rose to a high of 20,435 yuan/mt. Following a strong performance of rising for three consecutive days, it is likely to extend gains in the near term.
Tin: LME tin broke the support at $20,000/mt overnight as the US dollar gained on eased China-US trade war tension. It is likely to trade weakly in the short run with support at $19,300/mt. The SHFE 1809 contract fell to a lower level from the previous day at 144,430 yuan/mt. We see it testing support at 143,000 yuan/mt in the short term.