SMM Morning Comments (Sep 18)

Price Review & Forecast 09:30:03AM Sep 18, 2018 Source:SMM

SHANGHAI, Sep 18 (SMM) – 

Copper: LME copper opened at a low of $5,858/mt today as shorts surged on news that the US is on the cusp of implementing tariffs of 10% on $200 billion worth of Chinese goods. Spot premiums are expected to stay at highs on expectations of rising demand before the upcoming week-long National Day holiday. Premiums are set at 190-250 yuan/mt today. 

Aluminium: LME aluminium climbed up during the European trading session, with limited momentum. It closed at $2,033.5/mt after it rose to a high of $2,043/mt. Today, the market will follow closely the development of fresh US tariffs on $200 billion worth of Chinese goods. Cautious investors kept the SHFE 1811 contract within 14,455-14,505 yuan/mt overnight. The contract is expected to trade at 14,440-14,550 yuan/mt today with spot discounts at 60-20 yuan/mt. 

Zinc: A shrinking LME zinc inventory benefited prices, which grew $20.5/mt to close at $2,333/mt. We expect LME zinc to test pressure at the five-day moving average above today. Trade concerns will keep it trading weakly around $2,290-2,340/mt. The SHFE 1811 contract tested the 20-day moving average above when it rose to a high of 20,650 yuan/mt. Due to its weak LME counterpart, its trading range today is set at 20,200-20,700 yuan/mt. 

Nickel: LME nickel faced resistance at the five- and 10- day moving averages overnight, and settled 1.13% lower, even though pressure from the US dollar eased. The SHFE 1811 contract also fell as spot products increased faster than demand amid opened import window. We expect LME nickel to hover around $12,300/mt today with the contract trading at 101,000-102,500 yuan/mt. Spot prices are set at 102,000-108,500 yuan/mt. 

Lead: As the US dollar weakened, LME lead rose above the five-, 10-, and 20-day moving averages and closed at $2,068/mt. However, heavy pressure lingered above at the 40-day moving average and the $2,100/mt level. The SHFE 1810 contract settled 0.88% higher at 18,830 yuan/mt, but downward room remains amid cautious sentiment in the market.  

Tin: A lower US dollar buoyed LME tin to a high of $19,020/mt overnight, but continued trade war concerns weighed on the price, which slid $105/mt from last Friday to settle at $18,940/mt. Support below is seen at $18,600/mt. The SHFE 1901 contract also closed lower amid trade dispute threat. It will trade rangebound with support at 142,500 yuan/mt today.