SMM Morning Comments (Feb 27)

Published: Feb 27, 2018 10:05

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SMM Morning Comments

SHANGHAI, Feb 27 (SMM) -

Copper: We see SHFE copper gaining support at 53,000 yuan/mt in the short term as recovery of downstream consumption is set to boost copper prices. We expect LME copper to trade at $7,080-7,150/mt and the SHFE 1804 contract to trade at 53,190-53,700 yuan/mt today.

Aluminium: With pressure from short bets, we expect LME aluminium to continue to test the 60-day moving average and trade at $2,125-2,165/mt today, with the SHFE aluminium contract to test the five- and 10-day moving averages, trading at 14,100-14,300 yuan/mt. Spot discounts are seen at 240-200 yuan/mt.

Zinc: LME zinc is expected to test resistance at the five-day moving average, trading at $3,500-3,550/mt today. SHFE zinc is expected to stay firm as the market enters high season but we see limited upward room with the trading range at 26,420-26,880 yuan/mt. In the physical market, the 0# common brand is set to trade at a discount of 90-60 yuan/mt and Shuangyan brand is set to trade at a discount of 60-30 yuan/mt.

Nickel: With the strong performance of China's imports and ferrous metals, LME nickel gained over 1% overnight. We expect LME nickel to be rangebound while the SHFE 1805 contract trades at 104,400-106,000 yuan/mt today. Spot prices are expected at 103,700-105,300 yuan/mt.

Tin: We see LME tin remaining rangebound with support at $21,000/mt and resistance at $22,000/mt today. As SHFE tin failed to break resistance from moving averages overnight, we expect the contract to trade at 147,000-148,500 yuan/mt today. In the physical market, spot prices are likely to stay flat and trade at 147,500-104,500 yuan/mt with high inventories.

Lead: As SHFE lead registered a five-day high and traded across moving averages, we expect it to hit the 19,500 yuan/mt level, trading at 19,350-19,550 yuan/mt today. However, risks remain as investors take profits from their long positions.

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copper aluminium nickel zinc lead tin

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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