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SMM Morning Comments (Aug 14)
Aug 14,2018 09:39CST
SMM Comments
SMM Morning Comments

SHANGHAI, Aug 14 (SMM) –

Copper: Copper prices traded rangebound overnight. LME copper moved at $6,100-6,200/mt and was under pressure from a strong dollar. The SHFE 1810 contract came off from early gains and closed at 49,700 yuan/mt. Open interests for SHFE copper contracts remained at some 600,000 lots. We expect LME copper to trade at $6,110-6,160/mt today with the SHFE 1810 contract at 49,500-50,000 yuan/mt. Spot premiums are seen at 30-70 yuan/mt.

Aluminium: LME aluminium rebounded from a low of $2,070/mt and closed at $2,080/mt on Monday. The metal hovered within a range of $25/mt for most of the day. We expect it to continue such rangebound pattern today with a trading range of $2,060-2,100/mt. The SHFE 1810 contract lost all its early gains from a high of 14,740 yuan/mt to a low of 14,635 yuan/mt before it recovered some losses and closed at 14,660 yuan/mt overnight. We expect the contract to trade at 14,600-14,800 yuan/mt today. Spot discounts are seen at 40-0 yuan/mt.

Zinc: LME zinc plunged past the lower Bollinger band and closed at $2,467/mt on Monday due to a strong dollar and a 14,800-mt increase in LME inventory. We expect it to trade below the lower Bollinger band today with a trading range of $2,470-2,520/mt. The SHFE 1810 contract opened lower and fell overnight, settling at 20,850 yuan/mt, as shorts significantly added their positions. As some shorts may take profits, the contract is likely to consolidate at 20,850-21,350 yuan/mt today.

Nickel: LME nickel lost all the gains it made last week and closed at $13,535/mt on Monday. The SHFE 1811 contract overnight plummeted past the 20-day moving average to 111,330 yuan/mt after its initial, mild gains. It then recovered some losses and closed at 112,030 yuan/mt. We expect nickel prices to continue their weak performance today. LME nickel is likely to hover around $13,600/mt and the SHFE 1811 contract is likely to trade at 112,000-113,800 yuan/mt. Spot prices are seen at 112,000-114,000 yuan/mt.

Lead: LME lead regained the ground at $2,100/mt, hitting a high at $2,121/mt, and closed at $2,103/mt on Monday. While the metal stemmed its recent tumbles, pressure is still lingering at several moving averages above. We expect it to consolidate around $2,100/mt today with a trading range of $2,090-2,120/mt. The SHFE 1809 contract reversed its early losses before it fell again and finished the overnight session lower at 18,160 yuan/mt. Three consecutive days of declines sent the contract towards the 18,000 yuan/mt level again. We expect it to trade at 18,000-18,250 yuan/mt today. Spot prices are seen at 18,100-18,250 yuan/mt in the Shanghai market.

Tin: LME tin traded under pressure and closed at a low of $19,325/mt as the US dollar strengthened to a 14-month high. Further downward room is seen in the short run. Support will be at $19,000/mt. The SHFE 1809 contract also fell, below all moving averages on a stronger US dollar and its dipping LME counterpart. The contract is likely to weaken further but with support at 142,500 yuan/mt.


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