SMM Morning Comments (Feb 23)

SHANGHAI, Feb 23 (SMM) –

Copper: We see copper continue to rebound after touching a low at 51,000 yuan/mt ahead of Chinese New Year. LME copper is expected to trade at $7,140-7,200/mt today with SHFE copper at 53,200-53,900 yuan/mt. In the physical market, spot discounts are seen smaller at 250-180 yuan/mt as downstream customers resume operations gradually.

Aluminium: LME aluminium is expected to trade at $2,172-2,200/mt today with support at the 10- and 60-day moving averages and resistance at the five- and 20-day moving averages. As investors added to their long bets, SHFE aluminium is set to test and hit the 10-day moving average today, trading at 14,200-14,380 yuan/mt. Spot discounts are seen at 280-240 yuan/mt.

Nickel: Higher crude oil prices have given confidence to the base metals complex and LME nickel is expected to stay firm today. We see the SHFE 1805 nickel contract at 103,000-105,500 yuan/mt with spot prices at 102,300-104,800 yuan/mt today.

Zinc: LME zinc is expected to stay firm with steadily lowering inventory and trade at $3,500-3,550/mt today, while SHFE zinc is expected to trade at 26,450-26,900 yuan/mt with higher social inventory post- Chinese New Year. Thin liquidity also added to the pressure.

Lead: As the physical market is set to see post-holiday restocking amid weak US dollar, we expect SHFE lead to hit the 20-day moving average level, trading at 19,250-19,450 yuan/mt today.

Tin: We expect SHFE tin to be rangebound today at 146,500-148,500 yuan/mt, while LME tin sees support at $21,000/mt and pressure at $22,000/mt.

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