SHANGHAI, Dec 21 (SMM) –
Copper: Optimism in the global market including the passage of US tax reform, the country’s expected investment in infrastructure, and firming economy in Europe has contributed to the rally in copper prices these days. However, it is a different story in China where demand is weak. In addition, serious shortage in natural gas supply has impacted operations at copper processing plants, leading to worsening copper demand. We expect there is still room for copper to go up in the near term due to the inflow of speculative funds but fundamentally pressure remains at levels just above $7,000/mt.
Aluminium: SMM does not believe alumina price would go up because of individual production issues over natural gas shortage. Therefore we see limited momentum for aluminium price to go up further. LME aluminium is expected to trade at $2,110-2,140/mt today whereas the SHFE contract would be rangebound at 14,600-14,800 yuan/mt. The spot discount remains at 270-230 yuan/mt.
Nickel: LME nickel was supported by the 40-day moving average, but it is expected to see weakening upward momentum today. The main 1805 SHFE contract is expected to trade at 95,100-97,000 yuan/mt, with spot price at 94,800-96,500 yuan/mt.
Zinc: Investors of LME zinc appeared to be cautious in making decisions as the holiday season approaches and we see the higher level it has achieved difficult to maintain. LME zinc is expected to trade at $3,200-3,245/mt. On the SHFE, zinc is unlikely to rally to a new high in the near term as current natural gas shortage suppressed some demand. It is expected to trade at 25,350-25,780 yuan/mt today.
Tin: LME tin rallied but we see upper resistance at 40-day moving average. SHFE tin is faced with switching of the main contract, therefore the 1801 contract saw less liquidity. It is expected to trade at 137,500-139,500 yuan/mt. In the physical market, rising SHFE tin is set to boost spot price, which is expected to trade at 138,500-139,500 yuan/mt.
Lead: SHFE lead dropped below the 5-day moving average. It is expected to stay rangebound in the short term.
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