SMM Morning Comments (Mar 7)

SHANGHAI, Mar 7 (SMM) –

Copper: The support at the 40-day moving average, or 52,000 yuan/mt, remained for SHFE copper, while destocking in China helped the bullish sentiment somewhat. We expect copper prices to go up further with SHFE 1805 at 52,500-53,000 yuan/mt today and LME copper at $6,960-7,020/mt. Spot discounts are expected to be smaller as sellers continued to hold on to their cargoes.

Aluminium: Both sides of the market were trying to weigh in on SHFE aluminium following remarks on China’s capacity cut yesterday. However, we see fundamentals to have more impact on the price movement in the near term and expect the contract to trade at 14,350-14,500 yuan/mt today. Spot discounts are seen 160-120 yuan/mt.

Nickel: We expect LME nickel to be rangebound with pressure from several moving averages, while the SHFE 1805 contract may trade at 102,500-103,800 yuan/mt today. Spot prices are seen at 101,800-103,000 yuan/mt.

Zinc: We see some recovery in consumption in China’s major zinc markets and we expect SHFE zinc to trade at 25,200-25,650 yuan/mt today. The halt in LME inventory increase also gave some support to LME zinc, which is expected to trade at $3,285-3,330/mt.  

Tin: SHFE tin traded below the 40-day moving average overnight and we expect it to trade at 146,000-147,500 yuan/mt today. LME is also set to stay rangebound with a weaker US dollar.

Lead: The SHFE 1804 lead contract is expected to rangebound at current levels and trade at 18,600-18,800 yuan/mt today, testing the five-day moving average.

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