SHANGHAI, Jul 11 (SMM) –
Copper: LME copper lacked upward momentum with pressure at the five-day moving average. It tumbled from a high of $6,441/mt and hit the lowest level overnight at $6,301/mt. The SHFE 1809 contract followed a similar trend, weakening to a low of 49,240 yuan/mt. Market worries increased as the US released a list of $200 billion worth of Chinese goods facing new tariffs. We see LME copper trading at $6,150-6,220/mt today with the SHFE 1809 contract at 48,500-49,200 yuan/mt. Spot offers are likely to fall on dipping futures prices, to a discount of 50-0 yuan/mt.
Aluminium: LME aluminium tumbled from above the 10-day moving average level to a low of $2,081.5/mt on intensified trade conflicts. It is likely to trade under pressure at $2,060-2,085/mt today. The SHFE 1809 contract dropped slower overnight compared with most base metals. It is seen hovering at 14,000-14,200 yuan/mt with spot discount at 40-0 yuan/mt.
Zinc: LME zinc traded weakly overnight as it touched a one-year low at $2,607.5/mt, and closed at $2,628/mt, down 60 yuan/mt from Monday. It slumped to below $2,600/mt this morning without effective support. We expect it to hover at $2,570-2,620/mt today. The SHFE 1809 contract was also in a downward trend and is likely to weaken further given expectation on a stronger US dollar today. The contract is set to trade at 20,700-21,200 yuan/mt today.
Nickel: LME nickel fell below support at $14,100/mt to a low of $14,000/mt as the US dollar inched up. It closed at $14,170/mt with inventory across LME warehouses down 1,548 mt to 263,994 mt. The SHFE 1809 contract diverged from the daily moving average after opening and touched a low of 111,090 yuan/mt, amid increasing inventory as imports window opened. It also met support at the five-day moving average. Downward room is seen for nickel prices in the short term with LME nickel at $13,800-14,100/mt, and SHFE 1809 contract at 110,800-112,200 yuan/mt today. Spot prices are seen at 111,000-112,200 yuan/mt today.
Lead: LME lead fell along the five-day moving average last night with longs unwilling to build positions. Pressure is seen at the five-day moving average in the short term. As shorts took profits and left, the SHFE 1808 contract pared back some losses after touching a low of 19,240 yuan/mt. We see limited upward momentum for the contract in the short term as longs were not keen to enter the market and as open interest shrank.
Tin: LME tin rebounded overnight and traded above the 10-day moving average. It is likely to continue to recover some losses after consecutive declines. Resistance is seen at the $20,000/mt level. The SHFE 1809 contract extended its mild gains, trading around the 10-day moving average for the most part with resistance at the 145,000 yuan/mt level. It is likely to remain strongly rangebound in the short term.