SMM Morning Comments (Mar 28)

Published: Mar 28, 2018 09:37

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SMM Morning Comments

SHANGHAI, Mar 28 (SMM) –

Copper: LME copper rose above the five-day moving average overnight for the first time in five to six days. This trend is likely to stabilise, but growing inventories of LME copper will weigh on the prices. We see it trading at $6,620-6,680/mt today. SHFE copper lacks strong support as domestic demand has not fully recovered and as supply of refined copper is adequate. We see the SHFE 1805 contract trading at 49,450-49,800 yuan/mt with spot discounts at 190-140 yuan/mt today.

Aluminium: LME aluminium rose but closed lower. This suggests that it met strong resistance. We expect it to trade at $2,030-2,055/mt today. SHFE aluminum managed to rise above the five-day moving average and is expected to trade at 13,720-13,900 yuan/mt as consumption picks up and fears of a trade war cool.

Zinc: With limited pressure at the $3,300/mt level, LME zinc rose overnight.It will test trading at $3,260-3,310/mt today. Suppressed by bearish sentiments, SHFE zinc struggled at the 25,000 yuan/mt level overnight. We expect it to test the level again and trade at 24,650-25,150 yuan/mt today. The 0# common brand will trade at a discount of 30 yuan/mt to a premium of 10 yuan/mt and Shuangyan brand will trade at a discount of 20 yuan/mt to a premium of 20 yuan/mt.

Nickel: As the US dollar rebounded, LME nickel weakened and fell to a low of $12,930/mt overnight. It is likely to trade rangebound with pressure today. As the domestic demand of stainless steel recovers slowly, SHFE nickel sees limited upward room with resistance from several moving averages above. We expect the SHFE 1805 contact to trade at 96,000-98,000 yuan/mt today, with spot prices at 95,500-97,500 yuan/mt.

Tin: LME tin traded rangebound overnight with support at $20,600/mt and resistance at $21,100/mt. SHFE tin traded weakly around low levels overnight. It is likely to trade at 141,000-142,500 yuan/mt today.

Lead: After LME lead closed higher and stood above the 10-day moving average overnight, we expect it to hover around the $2,400/mt level today. SHFE lead managed to stand above the 20-day moving average level and is expected to test the 40-day moving average today. However, it may come off from highs given limited upward momentum.

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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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