SHANGHAI, Dec 22 (SMM) –
Copper: Copper price surged to $7,088/mt but we see Chinese demand remain weak with significantly lower spot discounts toward the year-end. While the macroeconomic optimism is unlikely to fade anytime soon, we do not recommend taking more long positions. LME copper is expected to trade at $7,050-7,100/mt today and the SHFE contract at 54,200-54,700 yuan/mt. In the physical market, spot discounts are set to be 260-190 yuan/mt today as sellers were keen to offload their cargoes.
Aluminium: LME aluminium recorded a six-week high last night and we expect to see rangebound trading next, at $2,130-2,160/mt today. The SHFE contract would stay above the 20-day moving average, trading at 14,550-14,800 yuan/mt. Spot discounts are to go deeper at 300-260 yuan/mt today.
Zinc: Investors of LME zinc are reluctant to pour in more capital as we approach the holiday season. We expect the contract to trade at $3,210-3,255/mt today. On the SHFE, zinc is likely to trade at 25,300-25,780 yuan/mt today with no clear direction given.
Nickel: Nickel is supported by better profits at stainless steel mills and rising nickel pig iron prices. We expect SHFE 1805 nickel to trade at 94,500-96,600 yuan/mt today while spot market at 94,400-96,000 yuan/mt.
Lead: We maintain our view that lead would see rangebound trading in the near term.
Tin: LME tin is looking for direction with upper resistance at the 40-day moving average. The SHFE 1801 tin contract, on the other hand, is set to trade between 137,000 and 139,000 yuan/mt. Spot market prices are set to be 138,000-139,000 yuan/mt today.
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