SMM Morning Comments (May 16)

Published: May 16, 2018 10:00

Save

SMM Morning Comments

SHANGHAI, May 16 (SMM) –

Copper: Base metals faced resistance as US Treasury yields touched a seven-year high and as the US dollar strengthened last night. LME copper lacked upward momentum after it rose to a high of $6,905/mt, and fell to a low of $6,765/mt as the US dollar gained. The SHFE 1807 contract also dipped overnight as its LME counterpart weakened. The contract is likely to trade weakly in the short term with pressure from declining consumption in the upcoming low season. Growing copper inventories across SHFE warehouses in the last two weeks will also account for the SHFE 1807 trading weakly.

Aluminium: LME aluminium received support and rebounded to close at $2,322/mt after it fell to a low of $2,274/mt last night. It is expected to trade rangebound with downward room today as the US dollar strengthened. The SHFE 1807 contract regained most losses overnight to close at 14,715 yuan/mt with support from the five- and 10-day moving averages. Open interest of SHFE aluminium shrank 68,080 lots to 653,246 lots, falling to a record low since July 2017. The contract is likely to hover at 14,650-14,750 yuan/mt with spot discounts at 70-30 yuan/mt today.

Zinc: With pressure from the rising US dollar and Treasury yields, LME zinc dipped to a low of $3,044/mt after it rose to a high of $3,089.5/mt last night. It is likely to lack strong upward momentum and to trade at $3,030-3,080/mt today. The SHFE zinc 1807 contract mostly hovered at 23,680 yuan/mt and was not significantly affected by its LME equivalent. The contract is expected to trade at 23,450-23,850 yuan/mt as most investors take a wait-and-watch stance.

Nickel: As the US dollar rebounded above 93, LME nickel tumbled to a low of $14,205/mt during the European trading period overnight. It then gained support from the 20-day moving average and consolidated around the daily moving average. The SHFE 1807 contract surged to a high of 107,770 yuan/mt from a low of 106,210 yuan/mt overnight. We expect LME nickel to trade weakly rangebound today and the SHFE 1807 contract to move at 106,000-108,000 yuan/mt with spot prices at 105,500-107,500 yuan/mt.

Tin: The trading level of LME tin dipped below the five-day moving average overnight, while the SHFE 1809 contract traded rangebound below several moving averages. We expect the contract to continue its rangebound pattern under pressure today with a trading range of 145,000-146,500 yuan/mt.

Lead: Overnight, LME lead lost its gains during the previous day with support at the five-day moving average. It is expected to trade rangebound around the five-day moving average today. The SHFE lead 1806 contract dipped twice to around 19,250 yuan/mt overnight but received considerable support. It is likely to test support at the five-day moving average with upward room today.

For editorial queries, please contact Daisy Tseng at daisy@smm.cn
For more information on how to access our research reports, please email service.en@smm.cn

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.

For any inquiries or to learn more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

15 hours ago

"Premier Li Qiang Leads State Council Meeting on Enhancing Effective Investment, Boosting Economic Growth"

Premier Li Qiang presided over an executive meeting of the State Council to study policy measures for promoting effective investment. The meeting noted that promoting effective investment plays an important role in stabilizing economic growth and strengthening momentum for development. It is necessary to innovate and improve policy measures, and intensify efforts to enhance the efficiency of utilizing funds such as central budget investments, ultra-long-term special treasury bonds, local government special bonds, and new-type policy-based financial instruments. In conjunction with formulating and implementing the 15th Five-Year Plan

15 hours ago

"Guided by Xi Jinping Thought, Implement 20th CPC Congress Spirit, Apply New Development Philosophy...

Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we will thoroughly implement the spirit of the 20th National Congress of the Communist Party of China and the plenary sessions of the Party’s 20th Central Committee, fully and faithfully apply the new development philosophy, strengthen top-level design, build computing power interconnection nodes oriented toward national hub periods, major strategic regions, and key industries, establish a system of computing power interconnection nodes, improve the efficiency and service level of public computing power resources, and promote high-quality development of computing power.

15 hours ago

Indirect Iran-US Nuclear Talks in Muscat Show Progress, Omani FM Mediates Tense but Efficient Discussions

After intensive indirect consultations, the new round of nuclear talks between Iran and the US in Muscat, the capital of Oman, has achieved phased progress. It is reported that during this round of talks, the Iranian and US delegations did not meet directly. Instead, Omani Foreign Minister Badr acted as an intermediary, conveying a series of core proposals, strategic concerns, and policy positions to the other side. The atmosphere at the talks was tense yet efficient. According to preliminary on-site assessments, although both sides continue to negotiate over specific terms, they have reached a consensus on the key objective of "continuing dialogue."

15 hours ago