SMM Morning Comments (Mar 20)

Published: Mar 20, 2018 09:30

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SMM Morning Comments

SHANGHAI, Mar 20 (SMM) –

Copper: LME copper fell below the five- and 10-day moving averages without firm support, while the SHFE 1805 contract traded below moving averages with some support at the 51,000 yuan/mt level. We expect LME copper to trade at $6,800-6,850/mt today and SHFE copper to trade at 51,150-51,500 yuan/mt. In the physical market, spot discounts are seen at 230-180 yuan/mt given ample supply.

Aluminium: There will be limited downward room for the US dollar if interest rates increase. This may give little support to LME aluminium to stand firmly at the $2,100/mt level. We expect the contract to trade at $2,075-2,100/mt today. As we only saw a small growth in inventories on Monday and as the five-day moving average rose to the 10-day moving average, we expect SHFE contract to trade at 13,950-14,080 yuan/mt, with spot discounts at 160-120 yuan/mt.

Zinc: LME zinc is seen to be supported by the rise in LME cancelled warrants in the short term, but with limited upward room as the inventory is above the lower level. We expect it to trade at $3,225-3,275/mt today. SHFE zinc met pressure from shorts and lacked support, touching a low of 24,785 yuan/mt overnight. As consumption resumes slower than expected, the price is likely to trade rangebound at 24,600-25,050 yuan/mt.

Nickel: LME nickel rose to a high of $13550/mt and dipped to a low of $13355/mt overnight as the US dollar fluctuated. We expect it to trade rangebound with downward room today. SHFE nickel continues to face pressure from several moving averages as weak demand for stainless steel slows down the consumption. We see the SHFE nickel 1805 contract trading at 101,000-103,000 yuan/mt with spot prices at 100,500-102,200 yuan/mt today.

Tin: Affected by a weaker US dollar, LME tin fell to a low of $20,650/mt and closed at $20,835/mt overnight, down $150/mt than the previous day. SHFE tin traded rangebound at 144,300 yuan/mt overnight. It is likely to be under pressure and test support at 143,000 yuan/mt in the short term. We see it trading at 143,500-144,700 yuan/mt today.

Lead: LME lead lost its gains overnight as the cautious sentiment ahead of the Fed meeting dragged down LME lead. The SHFE contract 1805 consolidated around the moving averages after a touch of the 18,435 yuan/mt level. We expect the two to remain rangebound and weaken under pressure from moving averages.

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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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