SMM Morning Comments (Feb 27)

SHANGHAI, Feb 27 (SMM) - 

Copper: We see SHFE copper gaining support at 53,000 yuan/mt in the short term as recovery of downstream consumption is set to boost copper prices. We expect LME copper to trade at $7,080-7,150/mt and the SHFE 1804 contract to trade at 53,190-53,700 yuan/mt today.

Aluminium: With pressure from short bets, we expect LME aluminium to continue to test the 60-day moving average and trade at $2,125-2,165/mt today, with the SHFE aluminium contract to test the five- and 10-day moving averages, trading at 14,100-14,300 yuan/mt. Spot discounts are seen at 240-200 yuan/mt.

Zinc: LME zinc is expected to test resistance at the five-day moving average, trading at $3,500-3,550/mt today. SHFE zinc is expected to stay firm as the market enters high season but we see limited upward room with the trading range at 26,420-26,880 yuan/mt. In the physical market, the 0# common brand is set to trade at a discount of 90-60 yuan/mt and Shuangyan brand is set to trade at a discount of 60-30 yuan/mt.

Nickel: With the strong performance of China's imports and ferrous metals, LME nickel gained over 1% overnight. We expect LME nickel to be rangebound while the SHFE 1805 contract trades at 104,400-106,000 yuan/mt today. Spot prices are expected at 103,700-105,300 yuan/mt.

Tin: We see LME tin remaining rangebound with support at $21,000/mt and resistance at $22,000/mt today. As SHFE tin failed to break resistance from moving averages overnight, we expect the contract to trade at 147,000-148,500 yuan/mt today. In the physical market, spot prices are likely to stay flat and trade at 147,500-104,500 yuan/mt with high inventories.

Lead: As SHFE lead registered a five-day high and traded across moving averages, we expect it to hit the 19,500 yuan/mt level, trading at 19,350-19,550 yuan/mt today. However, risks remain as investors take profits from their long positions.

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