The U.S. debt ceiling deal is at odds, with most ultra-conservatives in the House of Representatives insisting on a fix or vote against it, but Republican dang has publicly opposed it, leaving markets in a quandary. Meanwhile, continued weakness in U.S. Treasury yields to their lowest levels in more than a week boosted risk appetite, while market investors also sought to take a positive cue from broader risk sentiment, with May's nonfarm payrolls report widely eyed for an upbeat message.
Back at home, the manufacturing purchasing managers' index fell sharply in May to 48.8, below economists' expectations of 49.4. The data showed a further contraction in domestic industrial activity, undermining sentiment and prompting investors to turn bearish on China, clouding the outlook for metals demand.
In industry news, Minmetals Resources' Las Bambas copper mine expects to invest $2 billion in Peru over the next few years to expand its presence in the country; Zijin Mining announced that its subsidiary, Julong Copper, would resume production.
In terms of fundamentals, the first quarter is the traditional consumption peak season, but demand has not been outstanding performance, and the current second quarter is in the summer slack season, demand recovery will be more difficult to have a spectacular recovery, for copper prices will be a continuing drag. However, the downstream in the previous price significantly lower to stimulate the downstream stock market increase, also support further inventory removal, positive for copper prices.
Overall, uncertainty over the U.S. debt deal is high, the game will continue, and strong U.S. economic data supports a June Fed rate hike, further boosting the dollar and weakening the outlook for metals demand. Domestic macro is weak, market sentiment is not high, the fundamentals have no strong driving force for the time being, so in the weak macro and weak fundamentals to form a bearish resonance, and then firm Shanghai copper is difficult to stick to its position, the price rebound momentum is insufficient, the trend of fatigue.
Domestic spot copper prices fell today (May 31), according to CCMN data:
Yangtze River spot 1# copper quote 65420-65460 yuan/ton, the average price of 65440 yuan/ton, compared to the previous trading day down 450 yuan/ton.
Guangdong spot 1# copper quote 65080-65280 yuan/ton, the average price of 65180 yuan/ton, compared with the previous trading day down 380 yuan/ton.
Commodity trade spot 1# copper quote 65230-65340 yuan/ton, the average price of 65285 yuan/ton, compared to the previous trading day down 460 yuan/ton.
Tianjin spot 1# copper quote 65420-65420 yuan/ton, the average price of 65420 yuan/ton, compared to the previous trading day down 450 yuan/ton.
Shanghai spot 1# copper quote 65260-65340 yuan/ton, the average price of 65750 yuan/ton, compared to the previous trading day down 450 yuan/ton.
