SMM Morning Comments (Apr 2)

SHANGHAI, Apr 2 (SMM) –

Copper: Supported by crude oil prices, SHFE copper rose and stood above the 10-day moving average with KDJ indicator expanding upwards. We expect the contract to trade at 50,200-50,700 yuan/mt today, with spot discounts at 150-100 yuan/mt.

Aluminium: We expect LME aluminium to hover around the $2,000/mt level and trade at $1,995-2,020/mt with limited upward room given US-China trade tension and high inventories. The SHFE 1805 aluminium contract touched a high of 13,955 yuan/mt following the strong performance of the ferrous complex on Friday night. We expect it to trade at 13,800-13,950 yuan/mt with spot discounts at 100-60 yuan/mt.

Zinc: As inventory steadily declined across three major markets in China, SHFE zinc stood firm around 25,000 yuan/mt with reduced pressure from the shorts. We see it trade at 24,850-25,320 yuan/mt today.

Nickel: SHFE nickel surged to a high of 101,950 yuan/mt towards midnight last Friday as investors added their long positions, driven by a weaker US dollar and declining inventory. We expect it to continue to test resistance above today. The SHFE 1807 contract is expected to trade at 99,000-101,500 yuan/mt with spot prices at 98,300-100,800 yuan/mt today.

Tin: SHFE tin kept the upward trend during last Friday’s night trading session and touched a high at 145,500 yuan/mt. The trend is likely to remain in the short term as investors cut their short positions amid a short supply of tin ore. The pressure, however, is seen at 146,500 yuan/mt. We expect the contract to trade at 144,000-146,000 yuan/mt today.

Lead: SHFE lead registered a fifth straight gain amid the strong performance of nonferrous metals on Friday night. We expect it to consolidate around the 19,000 yuan/mt level today. Investors should watch out for it to come off if longs cash in their positions.

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