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SMM Morning Comments (May 30)
May 30,2018 09:58CST
price review forecast
SMM Morning Comments

SHANGHAI, May 30 (SMM) – 

Copper: Copper prices dipped overnight amid bearish sentiment as US-Sino trade tension re-emerged and as Italy entered a political crisis. LME copper is expected to trade at $6,800-6,860/mt with the SHFE 1807 contract at 51,200-51,700 yuan/mt today. Spot discounts are seen at 90-30 yuan/mt as a deadlock continues between sellers and downstream buyers.

Aluminium: With pressure from a stronger US dollar, LME aluminium dipped below the 40-day moving average to a low of $2,247.5/mt. It failed to break its rangebound pattern last night. We see it trading at $2,250-2,280/mt today. The SHFE 1807 contract tested support at the 20-day moving average and saw an increase of long positions last night. It rose to a high of 14,780 yuan/mt before it dipped to close at 14,735 yaun/mt. We expect it to trade at 14,650-14,800 yuan/mt with spot discounts at 70-30 yuan/mt today. 

Zinc: LME zinc traded robustly last night but failed to stand firm above $3,100/mt. It is likely to trade at $3,060-3,100/mt today with support at the 10- and 20-day moving averages. The SHFE 1807 contract mostly hovered at a narrow range with pressure at the 60-day moving average and support at the 40-day moving average. The contract is expected to trade rangebound at 23,900-24,300 yuan/mt today. 

Nickel: LME nickel mostly hovered below the moving average overnight as the US dollar gained. It received support at the five-day moving average after dipping to a low of $14,775/mt. We see downward room as the White House announced last night that the US would levy 25% tariffs on Chinese goods. The SHFE 1807 contract also fell below the moving average last night and slumped to a low of 111,550 yuan/mt. It is expected to trade at 111,000-112,400 yuan/mt today with spot prices at 110,500-111,900 yuan/mt. 

Lead: LME lead came off and touched a low at $2,424/mt during the European trading hours as the US dollar rose. It then consolidated around the $2,435/mt level. We expect it to sustain its upward trend although it broke the support at the five-day moving average. Shorts initially dragged the SHFE 1807 lead contract to a low of 19,885 yuan/mt overnight and before it fell further to 19,860 yuan/mt. We continue to see an upward trend as longs add their positions. 

Tin: Last night, LME tin lost most of the gains that were bolstered by its SHFE counterpart during the Asian trading hours. We expect it to remain rangebound with support at the $20,300/mt level and resistance at the $20,600/mt level. The SHFE 1809 contract came off from a high of 157,560 yuan/mt overnight as some longs took profits and cut their positions. We see support at the 150,000 yuan/mt level.


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