SHANGHAI, Jan 3 (SMM) –
Copper: Weak manufacturing data across major economies grew concerns about slower global growth. This reduced long positions in LME copper and ended it lower for the sixth consecutive trading day at $47,300/mt. The SHFE 1903 contract also closed lower overnight at 47,300 yuan/mt, afteit dipped to a low of 46,960 yuan/mt. While improved ed market sentiment may bolster prices today, there is likely to be no technical support. We see LME copper trading at $5,850-5,900/mt, with the SHFE 1903 contract trading at 47,200-47,700 yuan/mt. Lower prices of futures and tight supplies may keep spot premiums at 60-140 yuan/mt today.
Aluminium: LME aluminium slumped to the lowest since January 2017 overnight as the US dollar strengthened. SMM maintains that macroeconomic pessimism will weigh on aluminium prices this year. Today, LME aluminium is likely to trade at $1,770-1,810/mt. The SHFE 1902 contract dipped in line with its LME counterpart, and settled at 13,375 yuan/mt. We see it trading at 13,220-13,350 yuan/mt today with spot discounts at 80-40 yuan/mt.
Zinc: Last night, LME zinc registered six consecutive trading days of decline as slower global economic growth weighed it to a month-low, below the $2,400/mt level. It also broke support at the Bollinger lower band. It is likely to trade weakly at $2,370-2,420/mt today. The SHFE 1902 contract slowed declines and settled at 20,410 yuan/mt after it rose to a high of 20,545 yuan/mt. Some shorts left the market and lowered open interests in the contract by 4,880 lots to 160,000 lots. However, waning support from consumption may keep it hovering at 20,100-20,600 yuan/mt today.
Nickel: LME nickel rebounded from a low of $10,530/mt and settled 1.69% higher at $10,825/mt. Departing shorts pulled the SHFE 1905 contract 1.59% higher at 88,560 yuan/mt, with open interests down 36,000 lots to 337,000 lots. Today, prices may continue to climb, with LME nickel trading around $10,800/mt and the SHFE 1905 contract at 87,500-89,000 yuan/mt. Spot prices are set at 88,000-91,000 yuan/mt.
Lead: A stronger US dollar dragged LME lead below support at the $2,000/mt level, and ended it 2.59% lower at $1,958.5/mt. This weighed on its SHFE counterpart, as the 1902 contract traded weakly below the daily moving average and closed 0.89% lower at 17,840 yuan/mt. We expect it to trade at 17,800-17,950 yuan/mt with LME lead at $1,950-1,970/mt today. Spot prices are likely at 18,450-18,500 yuan/mt.
Tin: Existing shorts pulled up LME tin by $30/mt and settled the SHFE 1905 contract 230 yuan/mt higher overnight. However, pressure above at the $19,500/mt level is likely to keep LME tin rangebound today. The SHFE 1905 contract will also face resistance above at the five-day moving average, and test that level today.