SMM Morning Comments (Apr 20)

Published: Apr 20, 2018 09:49

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SMM Morning Comments

SHANGHAI, Apr 20 (SMM) –

Copper: As most base metals went down overnight, LME copper dipped from highs to close at $6,962/mt. Technically, it remained above the 60-day moving average and touched the upper Bollinger Band. SHFE copper hit the 40-day moving average above with the five- and 10-day moving average rising. We expect LME copper to trade at $6,930-6,980/mt and SHFE 1805 at 51,200-51,700 yuan/mt today. Lower future prices are set to boost trading activity, and we see spot premiums likely to stand at 220-280 yuan/mt.

Aluminium: A stronger SHFE aluminium suppressed its LME counterpart overnight due to uncertainties of China’s export tariff over refined aluminium. LME aluminium dipped to a low of $2,397/mt and tested support at the five-day moving average overnight amid an overall selloff sentiment. Though uncertainty remains, we see upward room and expect the contract to trade at $2,410-2,500/mt today. SHFE aluminium is also likely to go up to 14,900-15,100 yuan/mt today. Spot discounts are seen narrower at 50-10 yuan/mt.

Zinc: LME zinc attempted to rebound at the 20-day moving average but lacked strong support from fundamentals overnight. It dipped to close at $3,216/mt. Without any market cues to give direction, we see the prices hovering at $3,200-3,250/mt today. As investors took a cautious stance, SHFE zinc also edged down with pressure at the 20-day moving average. We see it trading at 24,050-24,550 yuan/mt today.

Nickel: Speculative trading was reduced overnight as concerns over more US sanctions eased. LME nickel came off from a high since December 2014 as China's stainless steel market remained oversupplied. We expect it to consolidate at highs today. The SHFE 1807 contract is expected to trade at 105,000-107,000 yuan/mt today with spot prices at 104,500-106,500 yuan/mt.

Tin: LME tin traded rangebound with a low towards the 60-day moving average overnight. We expect it to continue such rangebound pattern with support at $21,300/mt. The SHFE 1809 contract consolidated around the 60-day moving average overnight. We expect it to remain rangebound at 147,000-148,500 yuan/mt today. Spot prices are seen to stabilise given the rangebound futures prices, with a trading range at 145,000-146,500 yuan/mt.

Lead: LME lead dipped to a low at $2,325/mt overnight as prices of aluminium and nickel fell from highs. It is likely to trade rangebound today. SHFE lead mostly hovered around the five-day moving average after it was dragged down to a low of 18,140 yuan/mt by its weak LME counterpart. We see it testing support at the five-day moving average 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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