SMM Morning Comments (Nov 16)

Published: Nov 16, 2018 09:40

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SMM Morning Comments

SHANGHAI, Nov 16 (SMM) –

Copper: LME copper traded robustly overnight after Fed Chair Jerome Powell expressed confidence in the US economy. It jumped to a high of $6,214/mt near closing and settled at $6,202/mt, around the Bollinger middle band. Investors in the SHFE 1901 contract hesitated as the downstream property and auto sectors cooled. Demand from the infrastructure industry will provide some support in the long run. We expect LME copper to trade at $6,180-6,230/mt today, with the SHFE 1901 contract trading at 49,500-50,000 yuan/mt. Spot premiums are set up to 50 yuan/mt as sellers firm up offers.

Aluminium: The SHFE 1901 unsuccessfully tested pressure at the 13,780 yuan/mt level last night. Weak fundamentals weighed it below the daily moving average and settled it at 13,720 yuan/mt. It is likely to trade at 13,700-13,800 yuan/mt today. LME aluminium also traded weakly as it failed to break resistance at the 60-day moving average and closed at $1,938/mt. Its trading range is set at $1,910-1,960/mt today.

Zinc: LME regained all losses during November as it jumped above the 60-, 20-, and 40-day moving averages overnight to a high of $2,605/mt. Record low inventories at LME warehouses also benefited prices. The SHFE 1901 contract consolidated within a narrow range around 21,350 yuan/mt as longs and shorts fought. It is likely to test resistance above and trade at 21,150-21,600 yuan/mt today.

Nickel: Nickel prices showed signs of rebound, supported by production curbs on the second round of environmental review and optimism around US-China trade talks. The SHFE 1901 contract tested pressure at the 95,500 yuan/mt level but dipped near closing and settled at a low of 94,340 yuan/mt. LME nickel closed at $11,325/mt after rebounded to highs around $11,500/mt. We expect it to hover around $11,300/mt today with the SHFE 1901 contract trading at 94,000-95,500 yuan/mt. Spot prices are seen at 94,000-105,500 yuan/mt today.

Lead: LME lead traded weakly around lows overnight and the SHFE 1901 contract extended its rangebound trend. They settled slightly lower by 0.18% and 0.69%, respectively, on the day with limited support below. We expect their weak trends to sustain today.

Tin: LME tin climbed up but failed to break pressure at $19,400/mt last night. The SHFE 1901 contract continued to hover around highs and settled 100 yuan/mt higher from Wednesday at 153,840 yuan/mt. It will test pressure above at 155,000 yuan/mt in the short run.

Morning comments Futures movement

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