SMM Morning Comments (Dec 20)

Published: Dec 20, 2018 09:26

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SMM Morning Comments

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.

Morning comments Copper Aluminium Zinc Lead Nickel Tin

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.

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