SMM Morning Comments (Feb 8)

Published: Feb 8, 2018 09:34

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SMM Morning Comments

SHANGHAI, Feb 8 (SMM) –

Copper: Lower oil prices and a stronger US dollar are bearish on base metals but we see limited downward room for copper due to expectations of tighter concentrate supply in the future. We expect LME copper to trade at $6,880-6,950/mt today and SHFE copper at 51,800-52,240 yuan/mt. As the SHFE physical delivery is around the corner, it would be difficult for spot copper with high premiums to find home.

Aluminium: LME aluminium may continue to test support at the 60-day moving average with trading range of $2,145-2,170/mt. The SHFE 1804 contract is relatively firmer and would look to hit its five-day moving average upwards and trade at 14,250-14,450 yuan/mt today. Spot discounts are narrower at 120-80 yuan/mt.

Nickel: A stronger US dollar on expectations of interest rate increase may see LME nickel trade weaker today. SHFE nickel is expected to trade at 100,000-102,200 yuan/mt with spot prices at 99,200-101,400 yuan/mt.

Zinc: LME zinc was under pressure but a support at the 40-day moving average remains firm with decent fundamentals. We expect funds to trade more cautiously and any drop would be limited with the contract trading at $3,360-3,410/mt. SHFE zinc also sees support at the 40-day moving average and a correction to the SHFE/LME price ratio is likely. We expect the contract to trade at 25,900-26,400 yuan/mt today.

Tin: LME tin is supported at $21,300/mt whereas SHFE tin is expected to trade at 149,500-151,500 yuan/mt today. In the physical market, limited lower-priced supply is set to keep spot discounts stable. We see mainstream products to trade at 147,000-150,000 yuan/mt today.

Lead: We see spot lead to fall another 200 yuan/mt today to 19,050-19,150 yuan/mt.

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copper aluminium lead zinc tin nickel

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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