SMM Morning Comments (Nov 15)

Published: Nov 15, 2018 09:49

Save

SMM Morning Comments

SHANGHAI, Nov 15 (SMM) –

Copper: LME copper returned to the five-day moving average amid rising hopes for a Brexit deal. It rose to a high of $6,123.5/mt overnight and closed at $6,100/mt. The SHFE 1901 contract also received support at the daily moving average and increased to a high of 49,280 yuan/mt as investors added their longs. However, long-term pressure is expected as the US dollar remains high and the market looks ahead for further interest rates hikes this year. We expect LME copper to trade at $6,050-6,100/mt today with the SHFE 1901 contract at 48,700-49,200 yuan/mt. Spot premiums are set at 50-110 yuan/mt on the last trading day before delivery.

Aluminium: As longs and shorts fought, the SHFE 1901 contract mostly hovered around the daily moving average with the highest level overnight at 13,785 yuan/mt. It settled below the five-day moving average at 13,680 yuan/mt. LME aluminium faced pressure as it grew to a high of $1,948/mt. Limited upward momentum saw it close at $1,942/mt, still below the five- and 10-day moving averages. It is likely to trade at $1,920-1,960/mt today with its SHFE counterpart trading at 13,700-13,800 yuan/mt. Spot offers are seen at a discount of 20 yuan/mt to a premium of 20 yuan/mt.

Zinc: LME zinc regained its initial losses overnight as a weaker US dollar and a surge of longs pulled it above the $2,500/mt level near closing. It ended Wednesday’s session 0.36% higher at $2,507/mt. The SHFE 1901 contract extended its weak trend during the day with limited downward room. It rebounded from a low of 20,630 yuan/mt and settled at 20,940 yuan/mt, with open interests down 3,812 lots to 220,000 lots. We expect it to continue to trade rangebound at 20,650-21,100 yuan/mt today, with LME zinc hovering at $2,475-2,525/mt.

Nickel: As the US dollar dipped from 16-month highs overnight, LME nickel tested pressure above at $11,350/mt several times. However, unsustained upward momentum lowered it to around the daily moving average, and closed it at $11,305/mt. LME nickel stocks shrank 294 mt to 216,306 mt. The SHFE 1901 contract also came off from a high of 94,510 yuan/mt and closed around the daily moving average at 94,200 yuan/mt. Slower-than-expected domestic demand is likely to see the contract trade at 93,500-95,000 yuan/mt today, with LME nickel hovering around $11,300/mt. Spot prices are seen at 94,500-105,500 yuan/mt today.

Lead: LME lead stopped its decline overnight as it settled higher on the day at $1,949/mt, with open interests up 1,671 lots to 114,310 lots. The SHFE 1901 contract rose above all moving averages to a high of 18,190 yuan/mt. It closed at 18,165 yuan/mt, and will likely maintain its rangebound pattern to the year-end.

Tin: Maintenance at a smelter in Gejiu of Yunnan province grew market confidence, buoying the SHFE 1901 contract to a high of 153,490 yuan/mt last night. It will continue to trade robustly today with resistance at 155,000 yuan/mt. Stronger SHFE tin contracts bolstered its LME counterpart, which increased to a high of $19,395/mt and settled at $19,335/mt. We expect it to test pressure above at $19,400/mt today.

Morning comments Futures movement

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.

For any inquiries or to learn more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

14 hours ago

"Premier Li Qiang Leads State Council Meeting on Enhancing Effective Investment, Boosting Economic Growth"

Premier Li Qiang presided over an executive meeting of the State Council to study policy measures for promoting effective investment. The meeting noted that promoting effective investment plays an important role in stabilizing economic growth and strengthening momentum for development. It is necessary to innovate and improve policy measures, and intensify efforts to enhance the efficiency of utilizing funds such as central budget investments, ultra-long-term special treasury bonds, local government special bonds, and new-type policy-based financial instruments. In conjunction with formulating and implementing the 15th Five-Year Plan

14 hours ago

"Guided by Xi Jinping Thought, Implement 20th CPC Congress Spirit, Apply New Development Philosophy...

Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we will thoroughly implement the spirit of the 20th National Congress of the Communist Party of China and the plenary sessions of the Party’s 20th Central Committee, fully and faithfully apply the new development philosophy, strengthen top-level design, build computing power interconnection nodes oriented toward national hub periods, major strategic regions, and key industries, establish a system of computing power interconnection nodes, improve the efficiency and service level of public computing power resources, and promote high-quality development of computing power.

14 hours ago

Indirect Iran-US Nuclear Talks in Muscat Show Progress, Omani FM Mediates Tense but Efficient Discussions

After intensive indirect consultations, the new round of nuclear talks between Iran and the US in Muscat, the capital of Oman, has achieved phased progress. It is reported that during this round of talks, the Iranian and US delegations did not meet directly. Instead, Omani Foreign Minister Badr acted as an intermediary, conveying a series of core proposals, strategic concerns, and policy positions to the other side. The atmosphere at the talks was tense yet efficient. According to preliminary on-site assessments, although both sides continue to negotiate over specific terms, they have reached a consensus on the key objective of "continuing dialogue."

14 hours ago