SMM Morning Comments (May 18)

Published: May 18, 2018 09:44

Save

SMM Morning Comments

SHANGHAI, May 18 (SMM) –

Copper: LME copper stuck between several moving averages with support at the 40-day moving average overnight. As the US dollar is unlikely to fall from highs in the short term, we see LME copper trading rangebound at $6,850-6,900/mt with the SHFE 1807 contract at 51,000-51,500 yuan/mt during the day. Spot discounts are expected at 100-20 yuan/mt as sellers are likely to hold back.

Aluminium: Prices of LME aluminium faced pressure overnight as CHALCO called for a lift of China's tariff on primary aluminium's export. The SHFE 1807 contract is expected to hover at 14,800-14,900 yuan/mt today with spot discounts at 100-80 yuan/mt as smelters increased deliveries.

Zinc: LME zinc traded rangebound around $3,075/mt with pressure from the daily moving average before bouncing to close higher at $3,091/mt overnight. It failed to stand firm above $3,100/mt with support at $3,050/mt. We see it trading at $3,060-3,110/mt today with resistance at the 20-day moving average. The SHFE 1807 contract also edged up to close at 23,720 yuan/mt overnight. It is likely to trade at 23,500-23,950 yuan/mt during the day.

Nickel: Despite a stronger US dollar, nickel prices are likely to receive support in the short term from shrinking inventories across both LME and domestic warehouses, and domestic consumption of stainless steel. LME nickel inched up to close at $14,590/mt overnight. We expect it to consolidate at current levels today. The SHFE 1807 contract is likely to trade at 107,300-109,200 yuan/mt today with spot prices at 106,800-108,700 yuan/mt.

Lead: LME lead rose to a high of $2,372.5/mt last night, as most base metals rebounded, andreturned above the five-day moving average. It is likely to see some upward room today. The SHFE 1806 contract received support at 19,500 yuan/mt and closed higher from Thursday at 19,595 yuan/mt. It is likely to fall from highs and test support at 19,500 yuan/mt today.

Tin: LME tin regained some losses after it fell to a low of $20,415/mt overnight. Given the strong US dollar, we expect it to continue its decline and test the support at the $20,600/mt level today. The SHFE 1809 contract opened lower and remained weak and rangebound overnight. We expect it to continue to test the support at the 145,000 yuan/mt level with a trading range of 145,000-146,000 yuan/mt 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 for 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

51 mins ago

Import Parity Inversion and Spot Premiums Weaken; Watch China’s Export Situation Going Forward

[SMM Imported Copper Market] Recently, China’s import parity inversion has been notable, and the backwardation structure of near-term LME contracts has widened. Sellers in the imported copper market have become more active in offering, and coupled with mediocre downstream consumption demand, spot premiums have shown a trend of retreating from highs. However, as the siphon effect from North America persists, imported copper supply replenishment is expected to remain limited in China, keeping spot premiums supported on the downside. In addition, some smelters have export expectations, so China’s subsequent export situation needs to be closely monitored.

51 mins ago

59 mins ago

Suppliers cut prices repeatedly to facilitate transactions; Shanghai spot copper premiums center shifted lower [SMM Shanghai spot copper]

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, today the SHFE copper price center rose further above 107,000 yuan/mt. High copper prices significantly dampened downstream purchases, and the market was still dominated by rigid demand buying. However, suppliers’ willingness to sell strengthened, and they continuously lowered their offers throughout the day to facilitate deals. As standard-quality copper prices pulled back, downstream purchase willingness improved, and some low-priced cargoes were traded gradually. Meanwhile, available cargoes of high-quality copper and registered SX-EW copper remained scarce, with relatively firm offers providing some support to spot premiums. Overall, against the backdrop of high copper prices suppressing demand and active price cuts by suppliers to sell, Shanghai spot copper prices against the SHFE 2608 contract are expected to remain at a premium tomorrow. The overall center may continue to be in the doldrums, but improved transactions at low prices may limit the extent of further pullbacks in premiums.

59 mins ago

1 hour ago

FCC Reportedly Drafting Ban on Chinese Data Center Components, Including Optical Modules

There are market reports that the US Federal Communications Commission (FCC) is drafting a ban aimed at prohibiting the import of new models of Chinese data center components, including optical modules. A relevant person in charge of securities affairs at Zhongji Innolight said that the company has taken note of the relevant market information, and after verification, the FCC has not yet issued any restrictive documents in the relevant field. Regarding the impact if the ban is introduced, the relevant person in charge said that since it has not been introduced, no comment will be made for the time being.

1 hour ago