SMM Morning Comments (Dec 21)

Published: Dec 21, 2018 09:42

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SMM Morning Comments

SHANGHAI, Dec 21 (SMM) –

Copper: Copper prices weakened overnight following the rout on Wall Street. LME copper finished Thursday some 0.8% lower at $6,017.5/mt. The SHFE 1902 contract came off from a high of 48,600 yuan/mt to end at 48,230 yuan/mt overnight. Worries over economic growth and an overnight plunge in oil prices are expected to keep copper prices weak today. LME copper is likely to trade at $5,880-6,060/mt with the SHFE 1902 contract at 48,100-48,600 yuan/mt. Spot premiums are seen at 50-170 yuan/mt.

Aluminium: After a higher open, the SHFE 1902 contract hovered between the five- and 20-day moving averages overnight and ended at 13,680 yuan/mt. The contract is expected to trade at 13,600-13,700 yuan/mt today with spot discounts at 90-50 yuan/mt. LME aluminium traded higher on Thursday and ended at $1,915.5/mt as the US dollar index fell below 97. With weakness in the dollar, LME aluminium is likely to rebound slightly and trade at $1,915-1,930/mt today.

Zinc: LME zinc fluctuated to close lower at $2,573.5/mt on Thursday. With cautious investors and a lack of direction in short-term moving averages, LME zinc is expected to hold stable and trade at $2,520-2,570/mt today. The SHFE 1902 contract jumped during earlier trades overnight and ended at 21,115 yuan/mt. SHFE zinc traded steadily with support at the 10- and 60-day moving averages. Despite tightening supplies in the spot market, SHFE zinc is unlikely to rally strongly in a low season of consumption. It is expected to trade at 20,850-21,250 yuan/mt today.

Nickel: LME nickel fluctuated to close lower at $10,955/mt on Thursday. The SHFE 1905 contract pared some earlier gains overnight and closed 0.3% higher at 90,110 yuan/mt. Nickel prices are expected to remain rangebound in the near term. LME nickel is likely to hover around $10,900/mt and the SHFE 1905 contract is expected to trade at 89,000-90,500 yuan/mt. Spot prices are seen at 89,500-95,500 yuan/mt.

Lead: LME lead moved out of a range at lows to a high of $1,982/mt on Thursday and closed at $1,974.5/mt, with pressure at the 60-day moving average. Strong pressure remains at $2,000/mt. After opening higher, the SHFE 1902 contract climbed overnight and ended at 18,120 yuan/mt. Standing above moving averages, the contract is expected to continue to trade rangebound.

Tin: Moving above the five-day moving average, LME tin inched up on Thursday and closed at $19,320/mt. It is expected to strengthen with weakness in the US dollar, with resistance at $19,500/mt. The SHFE 1905 contract continued its rangebound pattern overnight and ended at 146,340 yuan/mt. Without a clear direction, the contract is likely to remain rangebound into short term 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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