SMM Morning Comments (Sep 21)

Published: Sep 21, 2018 09:46

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SMM Morning Comments

SHANGHAI, Sep 21 (SMM) –

Copper: LME copper traded stronger than its SHFE counterparts when eased trade war worries and a weakened US dollar buoyed most base metals overnight. The prices are expected to remain their robust trends in the short run. Spot premiums may be lowered to 160-200 yuan/mt today as sellers are more willing to destock ahead of the Mid-Autumn Festival.

Aluminium: LME aluminium settled 1.31% higher at $2,056.5/mt after rising to a high of $2,061/mt as the US dollar slid. We retain our view that limited downward room is seen for the aluminium price with support from high costs of raw materials and falling inventories. LME aluminium will attempt to stand firm above the 20-day moving average, and trade at $2,050-2,065/mt today. Trading range for the SHFE 1811 contract is set at 14,600-14,720 yuan/mt with spot offers at a discount of 20 yuan/mt to a premium of 20 yuan/mt.

Zinc: LME zinc registered the third consecutive trading day of increase as it tested the 40-day moving average above and settled at $2,468/mt. As LME zinc inventory extended its decline, the price is expected to trade robustly at $2,430-2,480/mt today. The SHFE 1811 contract received support at the 40-day moving average, and closed slightly higher at 21,640 yuan/mt. It may trade at 21,250-21,750 yuan/mt today.

Nickel: A softened US dollar buoyed LME nickel and the SHFE 1811 contract overnight, but the contract rose slower than its LME counterpart with pressure from continued inflow of imports. We expect LME nickel to consolidate around $12,600/mt today with the 1811 contract trading at 103,000-104,500 yuan/mt. Spot prices are set at 103,300-109,500 yuan/mt today.

Lead: LME lead failed to receive support at the $2,000/mt level and dipped to a low of $1,994/mt, given the news that the Organization for Economic Cooperation and Development (OECD) trimmed its earlier outlook on global economic growth. The SHFE 1811 contract also slumped as shorts entered the market. The weak trends are likely to sustain in the short run.

Tin: LME tin rebounded after fell to a low of $18,860/mt as the US dollar declined. It mostly hovered between the five- and 20- day moving averages and settled at $18,990/mt. The SHFE 1901 contract consolidated around 146,000 yuan/mt last night. It may test pressure above at 146,500 yuan/mt today with LME tin facing resistance at $19,300/mt above.

Morning comments Futures movement

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