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SMM Morning Comments (Feb 6)
Feb 6,2018 09:40CST
price review forecastsmm insight
SMM Morning Comments


Copper: We see firm support for SHFE copper at the 53,000 yuan/mt level with both sides of the market at a standoff. In the spot market, sellers were unwilling to let go their cargoes at big discounts as the price spread between the SHFE 1802 and 1803 contracts continued to expand. We expect spot copper to trade at a discount of 40 yuan/mt to a premium of 20 yuan/mt today. 

Aluminium: The slump in US stocks overnight is set to put pressure on the market and we expect LME aluminium to stay rangebound at the $2,200/mt level. SHFE aluminium sees pressure at the five-day moving average and is expected to trade at 14,350-14,480 yuan/mt today. We see spot discounts steady at 140-100 yuan/mt.

Nickel: Nickel prices rebounded overnight as LME inventory continued to go lower and the appreciation of US dollar slowed. However, we believe the room upwards is limited with sluggish stainless steel consumption. In fact, there is risk of production cuts at stainless steel mills. We expect the SHFE 1805 nickel contract to trade at 102,200-104,200 yuan/mt today with spot prices at 101,300-103,200 yuan/mt.

Zinc: The SHFE zinc contract followed the lead of its western counterpart in the previous night trading session as it lacked support from the fundamentals. We expect the contract to trade at 26,650-27,100 yuan/mt today with LME zinc at $3,500-3,550/mt.

Tin: Spot tin prices are set to move in tandem with the futures due to thin physical trading activity. We see SHFE tin at 149,500-151,500 yuan/mt today with spot prices at 147,500-150,000 yuan/mt.

Lead: SHFE lead sees support at the 20-day moving average and we expect it to trade at 19,400-19,650 yuan/mt today. Spot trading would remain quiet as supply is limited and demand is poor ahead of Chinese New Year.  


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