SHANGHAI, Apr 17 (SMM) –
Copper: A fall in the US dollar pushed up copper prices overnight. LME copper stood above the 20-day moving average and touched a high of the 60-day moving average. The SHFE 1806 contract also stood at the 20-day moving average with much upward room. We expect LME copper to trade at $6,850-6,920/mt today and the SHFE contract to trade at 50,500-51,000 yuan/mt. Spot premiums are likely to stand at 180-220 yuan/mt against the SHFE 1805 contract.
Aluminium: LME aluminum soared and hit a high of $2,403/mt since 2011, at one point overnight. As US sanctions on Rusal continues to cast a shadow on the market, we expect LME aluminium to trade rangebound at $2,350-2,400/mt. SHFE aluminium stayed strong, buoyed by its LME counterpart. We expect it to trade rangebound at 14,800-15,000 yuan/mt. Spot discounts are seen at 120-80 yuan/mt.
Zinc: LME zinc broke the pressure level at the lower line of the Bollinger bands overnight. We see limited upward room and expect it to trade at $3,105-3,155/mt today. SHFE zinc rose as shorts reduced their positions. We expect it to trade at 23,350-23,800 yuan/mt. The 0# common brand is likely to trade at a premium of 140-180 yuan/mt against the SHFE 1805 contract while the Shuangyan brand trades at a premium of 150-190 yuan/mt.
Nickel: As the US dollar weakened, LME nickel tested a high of $14,375/mt overnight. We see it remaining at high levels today as global nickel inventories continue to shrink. Nickel prices are likely to gain some support as fuel-powered vehicles will be banned and gradually replaced by new-energy cars across Hainan province, according to a document issued recently by China's State Council. We expect the SHFE 1807 contact to trade at 103,000-105,000 yuan/mt today with spot prices at 102,800-104,500 yuan/mt.
Lead: As geopolitical tension let up and the US dollar dipped on a decline in US Treasury yields, LME lead climbed above the five- 10-, and 20-day moving averages with support from longs and rose to a high of $2,381/mt overnight. But this momentum is limited and we expect LME lead to fall from highs today. We see SHFE lead facing pressure in the near term as its recent consecutive drops weigh on market confidence.
Tin: LME tin broke the resistance at the five- and 20-day moving averages overnight with resistance at $21,300/mt. As shorts reduced their positions, SHFE tin rose and closed around the 10-day moving average. We expect it to trade at 143,500-145,000 yuan/mt with support from firm spot prices. As prices of futures rebound and tin plants offered high, spot prices are seen at 143,500-145,500 yuan/mt today.
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