SMM Morning Comments (Mar 23)

Published: Mar 23, 2018 09:40

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SMM Morning Comments

SHANGHAI, Mar 23 (SMM) –

Copper: As prospects of a trade war loomed, prices for copper are likely to edge down in the near future with pressure from short bets. We see LME copper trading at $6,630-6,700/mt, and SHFE copper at 50,000-50,400 yuan/mt today. Spot discounts are seen at 200-120 yuan/mt as consumers are eager to restock.

Aluminium: Increasing US trade protectionism dragged aluminium prices down, with LME and SHFE aluminium falling to lows of $2,063/mt and 13,755 yuan/mt respectively. We expect LME aluminium to weaken and trade at $2,050-2,090/mt with SHFE aluminium at 13,700-13,880 yuan/mt today. Spot discounts are seen at 120-80 yuan/mt.

Zinc: The China-US trade dispute escalated as tariffs were set for China overnight, and weighed on base metals. LME zinc lost support at the five- and 10- day moving averages, and dipped to a low of $3,182.5/mt last night. It will continue to face pressure and trade at $3,185-3,235/mt today. SHFE zinc also fell with resistance from short bets, and closed at 24,550 yuan/mt overnight. We expect it to trade rangebound at 24,250-24,750 yuan/mt today.

Nickel: LME nickel fell below the 60-day moving average as inventory grew overnight. It is expected to test support at $130,00/mt today. The SHFE 1805 contract will trade at 98,500-100,500 yuan/mt as the prices for downstream stainless steel remain low. We see spot prices at 98,000-99,800 yuan/mt.

Tin: As base metals fell across the board, LME tin did not lose much ground and traded mostly rangebound around the five-day moving average overnight. We see support at $20,600/mt today. SHFE tin hit an unexpected low of 137,130 yuan/mt as investors reduced their long positions overnight. We expect it to test support at 143,000 yuan/mt with downward room in the short term, and trade at 143,000-144,500 yuan/mt today.

Lead: Both LME and SHFE lead closed lower overnight given the simmering trade war between China and the US. We expect the two to continue to weaken today.

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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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