SMM Morning Comments (Jun 19)

SHANGHAI, Jun 19 (SMM) –

Copper: LME copper tumbled to a low of $6,918/mt on Monday. Worries of a slowdown in China’s economic growth grew as May data fell short of expectations. US-Sino trade tension further unsettled the global base metals market. We expect LME copper to trade at $6,950-7,020/mt today with the SHFE 1808 contract at 51,900-52,500 yuan/mt. Spot discounts are seen at 180-120 yuan/mt.

Aluminium: As the US dollar came off from highs, LME aluminium rebounded to a high of $2,228.5/mt on Monday after it fell to a low of $2,193.5/mt. We expect LME aluminium to trade rangebound at lows today with a trading range of $2,200-2,240/mt. The SHFE 1808 contract is expected to trade at 14,200-14,400 yuan/mt today with spot discounts at 100-60 yuan/mt.

Zinc: LME zinc hovered at lows overnight. As escalating US-Sino trade tension grew risk aversion, LME zinc is expected to remain under pressure and consolidate at $3,050-3,100/mt today. The SHFE 1808 contract is likely to fall and trade at 23,450-23,900 yuan/mt today as LME zinc plunged last Friday and limited support from fundamentals.

Nickel: LME nickel fell after it reached a high of $15,335/mt overnight with pressure from the 10-day moving average and poor risk appetite as trade tension grew. We expect LME nickel to trade weakly rangebound today with the SHFE 1809 contract at 113,900-115,800 yuan/mt. Spot prices are seen at 114,400-116,200 yuan/mt.

Lead: LME lead halted its downward trend last night and received support at the 40-day moving average. It closed at $2,438.5/mt, up $30.5/mt from Friday June 15, with open interests up 1,097 lots to 123,461 lots. It is likely to be dragged down by a lower SHFE lead today. The SHFE 1807 contract is expected to test support at 20,000 yuan/mt today.

Tin: LME tin dipped to a low of $20,500/mt overnight as US-Sino trade jitters intensified. It closed at $20,600/mt, down $145/mt from last trading day. It is likely to weaken further today with support at $20,300/mt.The SHFE 1809 contract will also trade with pressure amid a domestic slack season in the spot market. Support is expected at 146,000 yuan/mt.