SMM Morning Comments (Apr 3)

Published: Apr 3, 2018 09:42

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SMM Morning Comments

SHANGHAI, Apr 3 (SMM) –

Copper: After it was closed for two days, LME copper climbed up after it opened today. SHFE copper mostly traded above the 10-day moving average, with support at the five- and 10-day moving averages overnight. We see it trading at 50,100-50,600 yuan/mt with spot premiums at 0-50 yuan/mt today.

Aluminium: As LME aluminium opened higher, we expect it to rise and test support at the five-day moving average today and trade at $2,005-2,030/mt. As inventories continue to decline and prices of coal and alumina stabilise, we expect SHFE aluminium to trade rangebound at 13,950-14,150 yuan/mt today, with spot discounts at 110-70 yuan/mt.

Zinc: As a potential trade war looms, LME zinc is expected to trade cautiously at $3,265-3,310/mt today. SHFE zinc tested resistance at 25,000 yuan/mt with limited momentum overnight. It edged down to close at 24,850 yuan/mt. As the Qingming Festival approaches, we see SHFE zinc trading rangebound at 24,700-25,100 yuan/mt today with cautious investors in the market.

Nickel: SHFE nickel rebounded above the 100,000 yuan/mt level overnight. As inventories contine to shrink and China gradually resumes its consumption of stainless steel, we expect the SHFE 1807 contract to trade at 99,000-101,000 yuan/mt today with strong resistance from moving averages, with spot prices at 98,300-100,300 yuan/mt. We see LME nickel rising today.

Tin: LME tin faced some pressure from the 40-day moving average but is likely to extend its strong performance in the short run. The SHFE 1805 contract traded rangebound with pressure from the 40- and 60-day moving average. We expect it to trade between 145,000-146,500 yuan/mt today.

Lead: SHFE lead weakened overnight but received support at the five-, 10-, and 20-day moving averages. Following the plunge in the US stock market overnight, SHFE lead is likely to dip further 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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