SMM Morning Comments (Apr 25)

Published: Apr 25, 2018 09:45

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SMM Morning Comments

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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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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