SMM Morning Comments (Jan 11)

Price Review & Forecast 10:28:39AM Jan 11, 2019 Source:SMM

SHANGHAI, Jan 11 (SMM) –

Copper: The daily moving average and a higher US dollar weighed on LME copper, and settled it at $5,916.5/mt, with open interests down 3,077 lots. The SHFE 1903 contract also traded weakly as lower-than-expected inflation data from China depressed market sentiment. Prices failed to receive support from gains in the US stock market and robust crude oil prices. The contract diverged from all moving averages and may continue to trade weakly, rangebound today at 46,950-47,400 yuan/mt. LME copper is expected to trade at $5,900-5,950/mt. In the spot market, hesitant buyers and thin trades may lower offers to a discount of 20 yuan/mt. 

Aluminium: LME aluminium consolidated between the five- and 10-day moving average, with a low of $1,845/mt. Weak fundamentals are likely to see it trading at $1,840-1,875/mt today. The SHFE 1902 contract settled at 13,360 yuan/mt after shorts dragged it to a low of 13,335 yuan/mt. We retain the view that prices will hover at lows ahead of CNY. The trading range today is set at 13,320-13,420 yuan/mt today, with the biggest spot discounts expected at 40 yuan/mt. 

Zinc: LME zinc unsuccessfully tested pressure at the $2,500/mt level as shorts weighed it to a low of $2424.5/mt during the European trading session. It found support at $2,450/mt and closed at $2,454.5/mt overnight. As spot premiums also slumped, LME zinc is likely to test support below and trade at $2,435-2,485/mt today. The SHFE 1903 contract fell below all moving averages, and settled at 20,260 yuan/mt. A potential influx of imports amid an open import arbitrage window will limit any upward room in the prices. Today, it is expected to trade at 20,100-20,500 yuan/mt. 

Nickel: Both LME nickel and the SHFE 1905 contract declined below the five-day moving average, and settled lower overnight as the US dollar rebounded from a three-month low. They will trade with resistance today with LME nickel hovering around $11,250/mt and the SHFE 1905 contract trading at 90,000-91,500 yuan/mt. Spot prices are seen at 90,500-91,500 yuan/mt. 

Lead: LME lead climbed along the five-day moving average to a high of $1,984/mt. While most base metals declined on a rebounded US dollar, LME lead closed slightly higher at $1976.5/mt, with open interests down 2,869 lots. The SHFE 1902 contract rallied after dipped to a low of 17,275 yuan/mt, supported by its LME counterpart. Exiting shorts ended the contract at 17,495 yuan/mt, and led lower open interests by 760 lots to 57,194 lots. 

Tin: LME tin failed to extend increase overnight as the US dollar rebounded. It will face lingered pressure at the $20,100/mt level today. The SHFE 1905 contract came off after a gain and mostly hovered within the five- and 40-day moving averages. It will continue to trade rangebound today. 

SMM Morning Comments (Jan 11)

Price Review & Forecast 10:28:39AM Jan 11, 2019 Source:SMM

SHANGHAI, Jan 11 (SMM) –

Copper: The daily moving average and a higher US dollar weighed on LME copper, and settled it at $5,916.5/mt, with open interests down 3,077 lots. The SHFE 1903 contract also traded weakly as lower-than-expected inflation data from China depressed market sentiment. Prices failed to receive support from gains in the US stock market and robust crude oil prices. The contract diverged from all moving averages and may continue to trade weakly, rangebound today at 46,950-47,400 yuan/mt. LME copper is expected to trade at $5,900-5,950/mt. In the spot market, hesitant buyers and thin trades may lower offers to a discount of 20 yuan/mt. 

Aluminium: LME aluminium consolidated between the five- and 10-day moving average, with a low of $1,845/mt. Weak fundamentals are likely to see it trading at $1,840-1,875/mt today. The SHFE 1902 contract settled at 13,360 yuan/mt after shorts dragged it to a low of 13,335 yuan/mt. We retain the view that prices will hover at lows ahead of CNY. The trading range today is set at 13,320-13,420 yuan/mt today, with the biggest spot discounts expected at 40 yuan/mt. 

Zinc: LME zinc unsuccessfully tested pressure at the $2,500/mt level as shorts weighed it to a low of $2424.5/mt during the European trading session. It found support at $2,450/mt and closed at $2,454.5/mt overnight. As spot premiums also slumped, LME zinc is likely to test support below and trade at $2,435-2,485/mt today. The SHFE 1903 contract fell below all moving averages, and settled at 20,260 yuan/mt. A potential influx of imports amid an open import arbitrage window will limit any upward room in the prices. Today, it is expected to trade at 20,100-20,500 yuan/mt. 

Nickel: Both LME nickel and the SHFE 1905 contract declined below the five-day moving average, and settled lower overnight as the US dollar rebounded from a three-month low. They will trade with resistance today with LME nickel hovering around $11,250/mt and the SHFE 1905 contract trading at 90,000-91,500 yuan/mt. Spot prices are seen at 90,500-91,500 yuan/mt. 

Lead: LME lead climbed along the five-day moving average to a high of $1,984/mt. While most base metals declined on a rebounded US dollar, LME lead closed slightly higher at $1976.5/mt, with open interests down 2,869 lots. The SHFE 1902 contract rallied after dipped to a low of 17,275 yuan/mt, supported by its LME counterpart. Exiting shorts ended the contract at 17,495 yuan/mt, and led lower open interests by 760 lots to 57,194 lots. 

Tin: LME tin failed to extend increase overnight as the US dollar rebounded. It will face lingered pressure at the $20,100/mt level today. The SHFE 1905 contract came off after a gain and mostly hovered within the five- and 40-day moving averages. It will continue to trade rangebound today.