SMM Morning Comments (Apr 25)

SHANGHAI, Apr 25 (SMM) –

Copper: LME copper stood above all the moving averages overnight with the five-day moving average expanding downwards. SHFE copper touched the 60-day moving average with support from the five-day moving average. We expect LME copper to trade at $6,950-7,000/mt today with SHFE copper at 51,500-52,000 yuan/mt. In the physical market, sellers may lower their offers amid thin trading. Spot premiums are seen at 240-300 yuan/mt.

Aluminium: The SHFE aluminium contract hit pressure at 14,500 yuan/mt during the night trading session when arbitrage funds looked to push prices up. LME aluminium fell further and hit a low of $2,175/mt as Rusal’s Kubal smelter in Sweden said it has resumed part of the deliveries and operations. We except LME aluminium to trade at $2,165-2,255/mt today and SHFE aluminium at 14,300-14,550 yuan/mt. Spot discounts are expected at 70-30 yuan/mt.

Zinc: LME zinc saw pressure at the $3,250/mt level despite a continuous decline in inventory as a stronger US dollar weighed on the contract, which is expected to trade at $3,200-3,250/mt today. The SHFE 1806 zinc contract fell overnight with pressure from investors with short positions. We expect it to trade rangebound at 24,150-24,600 yuan/mt today.

Nickel: China’s sluggish stainless steel consumption and a slow destocking process would continue to give pressure to SHFE nickel. We expect the 1807 contract to trade at 102,500-104,500 yuan/mt today with spot prices at 102,000-104,000/mt.

Tin: LME tin was influenced more by news on the macro level instead of fundamentals of late as the metal’s supply-demand landscape saw little changes. The SHFE 1809 tin contract hit a high of 146,880 yuan/mt last night but pressure started the build. We expect the contract to trade at 146,000-147,500 yuan/mt today.

Lead: LME lead fell overnight following the lead of LME aluminium. We expect it to test support at $2,300/mt in the short term. The SHFE 1806 contract is set to test support at the 10-day moving average today.

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