SHANGHAI, Oct 19 (SMM) –
Copper: As the dollar strengthened, LME copper tumbled in late trading on Thursday and ended at $6,132/mt. It has closed lower for four consecutive days. The SHFE 1812 contract became the most traded SHFE copper contract overnight. As longs added and shorts cut their positions, the contract crept past the 50,000 yuan/mt level after it dropped to a low of 49,720 yuan/mt. On the technical front, LME copper fell past the 10-day moving average and the middle Bollinger band. Its KDJ lines diverged and expanded downwards while the MACD green line extended. While the SHFE 1812 contract closed above its opening price overnight, open interest for the SHFE copper complex stood below 600,000 lots, suggesting a bearish outlook on demand. Purchases across the physical markets remained sluggish in the previous day with spot discounts offered at 70-40 yuan/mt. Declines in copper prices might trigger some downstream purchases. LME copper is likely to trade at $6,100-6,160/mt today with the SHFE 1812 contract at 49,650-50,150 yuan/mt. Spot discounts are seen at 50-20 yuan/mt.
Aluminium: The SHFE 1812 contract climbed to close near session highs of 14,205 yuan/mt overnight, boosted by market talk that Jinjiang and Xinfa have cut their alumina capacity due to tight supplies of bauxite. While tovernight gains helped the contract regain some previous losses, it still stood below the five-day moving average. The contract is likely to trade at 14,100-14,250 yuan/mt today with spot discounts at 50-10 yuan/mt. While LME aluminium opened higher on Thursday, it fell to close near day-lows of $2,008/mt, a new low in a month. It is likely to remain weak today with a trading range of $2,000-2,030/mt.
Zinc: LME zinc fluctuated and found support at the five- and 10-day moving averages on Thursday. LME inventory decreased by 8,000 mt and this is set to support zinc prices. LME zinc is likely to trade rangebound at $2,630-2,680/mt today. The SHFE 1812 contract initially jumped to session highs of 22,240 yuan/mt before it plunged to 21,975 yuan/mt as shorts built their positions. With support at the five- and 10-day moving averages, the contract regained some losses and ended at 22,080 yuan/mt. Lowering spot premiums might prompt shorts to add their positions. The SHFE 1812 contract is likely to edge down today with a trading range of 21,800-22,300 yuan/mt.
Nickel: LME nickel touched the lowest in a month, at $12,225/mt amid volatile trading on Thursday. The SHFE 1901 contract climbed to 102,380 yuan/mt, near its five-day moving average, on short-covering before it came off to the daily moving average and closed at 101,810 yuan/mt overnight. The recent dips in SHFE nickel encouraged downstream consumers to purchase and this put a floor in a declining market. LME nickel is expected to hover around $12,300/mt today with the SHFE 1901 contract trading at 101,000-102,500 yuan/mt. Spot prices are seen at 102,000-109,000 yuan/mt.
Lead: LME lead fell and posted a three-day losing streak on Thursday, signalling the end of this round of rebounds. Longs and shorts are likely to struggle around $2,000/mt. The SHFE 1811 contract opened in negative territory. While it edged up by closing, it lost over 1% overnight. Support is seen at the 20-day moving average.
Tin: As the dollar strengthened, LME tin fell on Thursday with a trading range between the five- and 20-day moving averages. The contract is expected to remain rangebound in the short term with resistance at $19,300/mt and support at $18,800/mt. The SHFE 1901 contract traded under pressure overnight, rangebound between the five- and 10-day moving averages. Support was at 146,000 yuan/mt. The contract is likely to trade rangebound in the near term as weak demand in the domestic market provide limited support.