SMM Morning Comments (Mar 12)

Published: Mar 12, 2018 09:38

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SMM Morning Comments

SHANGHAI, Mar 12 (SMM) –

Copper: As the US dollar weakened and the US' February nonfarm payrolls performed well, nonferrous metals rebounded across the board and SHFE copper stood above 52,000 yuan/mt. But the pickup was limited by the anticipated trade war. We see it trading at 51,800-52,300 yuan/mt and LME copper trading at $6,950-7,000/mt today. In the physical market, spot discounts are seen smaller at 60-20 yuan/mt today as downstream production recovers slowly.

Aluminium: LME aluminium stayed firm above $2,100/mt over the weekend due to strong data from US non-farm payrolls. We expect it to test the five-day moving average and trade at $2,110-2,135/mt today. SHFE aluminium will rebound as consumption is expected to recover in the short term. We expect it to trade at 14,130-14,340 yuan/mt today. Spot discounts are seen at 120-80 yuan/mt.

Zinc: LME zinc is expected to stay rangebound, with limited upward room, and trade at $3,270-3,320/mt today. With pressure from shorts, SHFE zinc is set to trade at 24,900-25,400 yuan/mt today. The 0# common brand will trade at a discount of 60-30 yuan/mt and Shuangyan brand will trade at a discount of 20 yuan/mt to a premium of 20 yuan/mt.

Nickel: Prices of nickel are likely to rise as investors turn bullish on new energy vehicles. LME nickel will trade rangebound today while the SHFE 1805 contract will trade at 103,500-105,500 yuan/mt. Spot prices are seen at 102,800-104,700 yuan/mt.

Tin: LME tin traded rangebound with support at $21,000/mt, while SHFE tin rose with resistance from moving averages as investors reduced their short bets. We expect it to trade at 145,500-147,500 yuan/mt today.

Lead: As LME lead rebounded with resistance at $2,400/mt, SHFE lead climbed up and closed at 18,540 yuan/mt. It will trade rangebound with strong resistance at the five-day moving average today.

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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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