SMM Morning Comments (Mar 9)

Published: Mar 9, 2018 09:41

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SMM Morning Comments

SHANGHAI, Mar 9 (SMM) –

Copper: As news of the simmering trade war rattled markets and as global inventories remained at highs from last year, base metals slumped across the board. We expect LME copper to weaken to $6,700/mt in the short term and to trade at $6,790-6,950/mt today. We see SHFE copper trading at 51,300-51,800 yuan/mt. In the physical market, spot discounts are seen at 120-70 yuan/mt today.

Aluminium: LME aluminium inched up and received support at $2,100/mt overnight. We expect it trade at $2,095-2,120/mt today. SHFE aluminium is likely to face temporary downward pressure as China is unlikely to be exempt from the US tariffs. We see SHFE aluminium trading at 14,130-14,300 yuan/mt today.

Zinc: LME zinc continues to face resistance though inventories have declined for three days consecutively. It is expected to trade at $3,200-3,250/mt today. With pressure from shorts, SHFE zinc edged down overnight and is expected to trade rangebound at 24,800-25,250 yuan/mt today. Investors will take cues from the February data of China's Consumer Price Index (CPI) and US non-farm payrolls (NFP) today.

Nickel: With weak prices of stainless steel in China and production cuts at plants, LME nickel broke the 40-day moving average with support at $13,000/mt. We expect it to consolidate today, with the SHFE 1805 contract trading at 99,900-101,500 yuan/mt. Spot prices are seen at 99,300-100,800 yuan/mt.

Tin: LME tin traded rangebound, while SHFE tin rebounded above the 147,000 yuan/mt level overnight. We expect it to trade at 145,500-147,500 yuan/mt today. In the physical market, spot prices are seen at 144,500-146,500 yuan/mt with high inventories.

Lead: LME lead dropped below the 60-day moving average and hit a low of $2,334/mt overnight. Downward pressure from LME lead depressed SHFE lead which edged down and closed at 18,485 yuan/mt. We expect it to trade rangebound today as most smelters undergo maintenance.

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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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