SMM Morning Comments (Aug 23)

SHANGHAI, Aug 23 (SMM) –

Copper: LME copper traded rangebound at $6,000/mt and the SHFE 1810 contract hovered around 48,400 yuan/mt overnight. Open interests for SHFE copper contracts gained 1,400 lots to 591,000 lots. The 120- and 250-week moving averages crossed at $6,000/mt, indicating some support. Spot premiums are seen lower at 80-130 yuan/mt today.

Aluminium: LME aluminium traded strongly rangebound and closed at $2,065/mt on Wednesday. We expect it to trade at $2,060-2,080/mt today. As investors added their long positions before closing, the SHFE 1810 contract reversed most of its early losses and ended overnight 0.27% lower at 14,670 yuan/mt. We expect it to trade at 14,600-14,800 yuan/mt today with spot discounts at 70-30 yuan/mt.

Zinc: LME climbed to close Wednesday 1.3% higher at $2,462.5/mt after it broke the five-day moving average to an intraday low of $2,384/mt. It is likely to hover at $2,425-2,475/mt today. The SHFE 1810 contract opened higher and rose to a high of 20,780 yuan/mt overnight, closing at 20,770 yuan/mt. The contract approaches the middle Bollinger band but resistance overhead is strong. It is likely to consolidate at 20,450-20,950 yuan/mt today.

Nickel: LME nickel bounced back to close at $13,580/mt on Wednesday after it fell to an intraday low of $13,455/mt. The SHFE 1811 contract touched a low of 110,510 yuan/mt and closed overnight 0.5% lower at 111,490 yuan/mt. We expect nickel prices to continue such rangebound patterns today as investors monitor US-China trade talks. LME nickel is likely to hover around $13,500/mt and the SHFE 1811 contract is expected to trade at 110,500-112,000 yuan/mt. Spot prices are seen at 111,000-113,000 yuan/mt.

Lead: LME lead rebounded during the European trading session and ended Wednesday 0.02% higher at $2,015/mt. It lacked momentum on sluggish trading and investors should monitor support at the $2,000/mt level. The SHFE 1810 contract opened higher and jumped past the 10-day moving average overnight, settling at 17,740 yuan/mt. It is likely to come off today with resistance.

Tin: LME tin rebounded to a high of the 20-day moving average level as the US dollar weakened. We see resistance at $19,400/mt. A stronger LME tin buoyed the SHFE 1901 contract to close 460 yuan/mt higher from Tuesday. However, it failed to stand above the 10-day moving average. We expect the resistance above to be at 147,000 yuan/mt.