SMM Morning Comments (Dec 20)

SHANGHAI, Dec 20 (SMM) –

Copper: As shorts covered their positions after the US dollar index fell, LME copper crept to close at $6,065/mt on Wednesday. The SHFE 1902 contract rebounded to close at 48,440 yuan/mt overnight from a low of 48,140 yuan/mt. LME copper is expected to trade at $6,010-6,070/mt today and the SHFE 1902 contract is likely to trade at 48,200-48,500 yuan/mt. Spot premiums are seen at 20-120 yuan/mt.

Aluminium: After a higher open, the SHFE 1902 contract broke through the 20-day moving average to a high of 13,745 yuan/mt and ended at 13,725 yuan/mt overnight. LME fell to a low of $1,906.5/mt from the 10-day moving average on Wednesday and closed at $1,908/mt. The Fed’s interest rate hike announced overnight is set to weigh on LME aluminium today, which is likely to trade at $1,900-1,930/mt. The SHFE 1902 contract is expected to trade at 13,600-13,700 yuan/mt with spot discounts at 70-40 yuan/mt.

Zinc: A decline in the US dollar overnight helped LME zinc recover from earlier losses that were triggered by gains in LME zinc inventories. The LME three-month zinc contract ended higher at $2,545.5/mt. As consecutive increases in LME stocks limit upward momentum and with pressure at moving averages, LME zinc is likely to trade under pressure today with most transactions at $2,520-2,570/mt. The SHFE 1902 contract rallied from earlier lows and closed higher at 21,060 yuan/mt overnight. It is expected to remain rangebound today with a trading range of 20,800-21,200 yuan/mt.

Nickel: LME nickel climbed to close at $10,980/mt on Wednesday. Its SHFE counterpart also gained overnight, as shorts aggressively cut their positions, ending at 90,200 yuan/mt. LME nickel is expected to hover around $10,900/mt today with the SHFE 1905 contract at 89,000-90,500 yuan/mt. Spot prices are seen at 89,500-96,000 yuan/mt.

Lead: LME lead closed marginally lower at $1,956.5/mt on Wednesday after it came off from a high of $1,973/mt to a low of $1,937.5/mt. With pressure at moving averages, LME lead is unlikely to break the $2,000/mt level in the short term. The SHFE 1902 contract rebounded from earlier lows to end at 18,090 yuan/mt overnight. SHFE lead remained rangebound without clear direction.

Tin: LME tin rose to close at $19,305/mt on Wednesday and is expected to remain rangebound in the near term with resistance at $19,500/mt. The SHFE 1905 contract hovered around 146,700 yuan/mt overnight and ended at 146,850 yuan/mt. It remained rangebound with resistance at 147,500 yuan/mt and support at 145,000 yuan/mt.