SMM Morning Comments (Feb 26)

Published: Feb 26, 2018 09:46 (GMT+8)

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SMM Morning Comments

SHANGHAI, Feb 26 (SMM) -

Copper: Copper is set to remain firm in the medium term as a rebound in downstream consumption provides support to the physical market and as imports of copper scrap face restrictions. We expect LME copper to trade at $7,080-7,150/mt and SHFE copper to trade at 53,000-53,600 yuan/mt today. In the physical market, smaller spot discounts are seen at 200-150 yuan/mt as downstream consumption resumes.

Aluminium: We expect LME aluminium to test the 60-day moving average and trade at $2,130-2,160/mt today. With better performance expected from SHFE aluminium, the contract is expected to remain rangebound at the five- and 20-day moving averages, trading at 14,250-14,500 yuan/mt. Spot discounts are seen at 260-220 yuan/mt.

Nickel: We expect the SHFE 1805 contract to remain firm at 103,400-105,500 yuan/mt today, as LME nickel stays rangebound and as downstream consumption faces a potential rebound post-Chinese New Year. Spot prices are expected at 103,300-104,500 yuan/mt.

Zinc: Investors remain cautious despite the LME's upward room. We expect the contract to trade at $3,475-3,520/mt today. SHFE zinc remains weak despite strong support from moving averages. As consolidation continues, we expect the contract to trade at 26,300-26,750 yuan/mt today. In the physical market, the 0# common brand is set to trade at a discount of 70-50 yuan/mt and Shuangyan brand is set to trade at a discount of 20 yuan/mt to zero.

Tin: We expect SHFE tin to be rangebound today at 147,000-148,500 yuan/mt while LME tin sees support at $21,000/mt and resistance at $22,000/mt.

Lead: SHFE lead will stay rangebound today with strong resistance at the 40-day moving average.

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