SHANGHAI, Aug 6 (SMM) –
Copper: LME copper came off from a high of $6,230/mt and closed at $6,176/mt on Friday. The SHFE 1809 contract surged to 49,820 yuan/mt and closed at 49,550 yuan/mt on Friday night. Despite uncertain developments in the US-China trade disputes, we see possibility for copper prices to rebound given the low global inventory and the risk of a strike at Escondida copper mine. LME copper is likely to trade at $6,130-6,180/mt today with the SHFE 1809 contract at 49,200-49,600 yuan/mt. Spot premiums are seen at 50-100 yuan/mt.
Aluminium: LME aluminium traded rangebound on Friday, touching a low of $2,024.5/mt and hitting a high of $2,049/mt. We expect it to trade under pressure today within the range of $2,030-2,050/mt given the US-China trade spats. The SHFE 1809 contract hit a high of 14,455 yuan/mt and closed at 14,405 yuan/mt on Friday night. The contract gained support from the anticipation of winter production cuts and rebounding prebaked anode prices. We expect it to trade at 14,400-14,500 yuan/mt today with spot discounts at 90-50 yuan/mt.
Zinc: As Chinese yuan rebounded, LME zinc jumped and hit a high of $2,635.5/mt before it edged down and consolidated around $2,610/mt on Friday. We expect it to trade at $2,570-2,620/mt today amid escalating US-China trade tensions. The SHFE 1809 contract opened higher and jumped to a high of 21,845 yuan/mt on Friday night. It then hit another high of 21,890 yuan/mt after making some losses. With limited upward momentum, the contract fell and closed at 21,625 yuan/mt. We expect it to trade at 21,300-21,800 yuan/mt today.
Nickel: LME nickel remained its upward trend last Friday night and touched a high of $13,560/mt with resistance at the five-day moving average. Open interests increased 2,662 lots to 242,000 lots with LME inventory shrinking 792 mt to 253,278 mt. As shorts exited, the SHFE 1809 contract rebounded after dipping to a two-month low. We expect it to trade at 108,500-110,000 yuan/mt with the LME nickel hovering at $13,400/mt today. Spot prices are likely to be at 109,500-111,000 yuan/mt.
Lead: LME lead rebounded after being dragged down by its weakened SHFE counterpart to a low of $2,097/mt. Support at the $2,100/mt level will remain today. The SHFE 1809 contract faced pressure from several moving averages and plunged to a low of 17,900 yuan/mt. Although it closed slightly higher last Friday night, there is still downward room amid lingered trade tension between China and the US.
Tin: LME tin reversed early losses and closed at $19,630/mt on Friday while it remained under pressure. The SHFE 1809 contract hovered between the 40- and 10-day moving averages on Friday night and is expected to continue its rangebound pattern today with support at 145,000 yuan/mt and resistance at 147,000 yuan/mt.