SMM Morning Comments (Aug 23)

Published: Aug 23, 2018 09:49 (GMT+8)

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SMM Morning Comments

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.

Morning comments Copper Aluminium Zinc Lead Nickel Tin

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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