SMM Morning Comments (Apr 2)

Published: Apr 2, 2018 09:42

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SMM Morning Comments

SHANGHAI, Apr 2 (SMM) –

Copper: Supported by crude oil prices, SHFE copper rose and stood above the 10-day moving average with KDJ indicator expanding upwards. We expect the contract to trade at 50,200-50,700 yuan/mt today, with spot discounts at 150-100 yuan/mt.

Aluminium: We expect LME aluminium to hover around the $2,000/mt level and trade at $1,995-2,020/mt with limited upward room given US-China trade tension and high inventories. The SHFE 1805 aluminium contract touched a high of 13,955 yuan/mt following the strong performance of the ferrous complex on Friday night. We expect it to trade at 13,800-13,950 yuan/mt with spot discounts at 100-60 yuan/mt.

Zinc: As inventory steadily declined across three major markets in China, SHFE zinc stood firm around 25,000 yuan/mt with reduced pressure from the shorts. We see it trade at 24,850-25,320 yuan/mt today.

Nickel: SHFE nickel surged to a high of 101,950 yuan/mt towards midnight last Friday as investors added their long positions, driven by a weaker US dollar and declining inventory. We expect it to continue to test resistance above today. The SHFE 1807 contract is expected to trade at 99,000-101,500 yuan/mt with spot prices at 98,300-100,800 yuan/mt today.

Tin: SHFE tin kept the upward trend during last Friday’s night trading session and touched a high at 145,500 yuan/mt. The trend is likely to remain in the short term as investors cut their short positions amid a short supply of tin ore. The pressure, however, is seen at 146,500 yuan/mt. We expect the contract to trade at 144,000-146,000 yuan/mt today.

Lead: SHFE lead registered a fifth straight gain amid the strong performance of nonferrous metals on Friday night. We expect it to consolidate around the 19,000 yuan/mt level today. Investors should watch out for it to come off if longs cash in their positions.

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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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