SMM Morning Comments (Jan 15)

Price Review & Forecast 09:53:51AM Jan 15, 2019 Source:SMM

SHANGHAI, Jan 15 (SMM) –

Copper: LME copper faced pressure at the daily moving average after an unexpected decline in China’s exports reduced market confidence in global economic growth. With support at the 10-day moving average, LME copper closed at $5,912/mt with open interests down 278 lots to 287,000 lots. The SHFE 1903 contract also struggled around the daily moving average, to a low of 46,690 yuan/mt before it settled at 46,760 yuan/mt. We expect copper prices to hover at lows today with LME copper trading at $5,870-5,930/mt and the SHFE 1903 contract at 46,600-47,000 yuan/mt. On the last trading day for SHFE January contract today, traders will await offers over the SHFE 1902 contract in the spot market. 

Aluminium: LME aluminium extended declines further during the European trading session, and dipped to a low of $1,807/mt. It settled at $1,830/mt with open interests up 6,980 lots. We retain the view that weak fundamentals and falling costs will keep prices at lows in the medium term. It is likely to trade at $1,810-1,845/mt today, with the SHFE 1902 contract trading weakly at 13,200-13,300 yuan/mt. Spot offers are expected at a discount of 20 yuan/mt to a premium of 20 yuan/mt today. 

Zinc: Weak data on China’s trade surplus grew shorts in LME zinc, and weighed it to a low of $2,455.5/mt overnight. Support at the 10-day moving average, or the $2,450/mt level, pulled it from lows and closed at $2,472/mt. Continued pressure remained at the 20-day moving average. While LME zinc inventories extended their decline, prices saw limited support as macroeconomic sentiment weakened. We expect cautious investors to keep LME zinc to trading at $2,460-2,510/mt and the SHFE 1903 contract trading at 20,100-20,500 yuan/mt.  

Nickel: A buildup of shorts lowered LME nickel by 0.48% and dragged the SHFE 1905 contract by 0.21%. The $11,350/mt level provided support for LME nickel, while the contract found support at the five-day moving average. Today, we expect the contract to hover within 91,000-93,000 yuan/mt with its LME counterpart trading around $11,400/mt. Spot prices are set at 91,500-92,500 yuan/mt. 

Lead: LME lead came off after it rose to a high of $1,996/mt, and slid to a low of $1,965/mt during the European trading session. Support at the five-day moving average ended it at $1,980/mt, with open interests up 886 lots. It is likely to rebound from lows today and test resistance at the $2,000/mt level. The SHFE 1902 contract also found support at the five-day moving average, as it closed at 17,545 yuan/mt after consolidated around 17,480 yuan/mt. It is expected to cease falling and hover at current levels today. 

Tin: While most base metals dipped on concerns over global economic growth, LME tin traded robustly and jumped to a high of $20,555/mt, buoyed by lower supplies of Chines refined tin and smaller exports of Indonesia’s tin. It ended at $20,520/mt and could test pressure at $21,000/mt in the short run. The SHFE 1905 contract consolidated at highs but failed to break resistance at the 60-day moving average. The delayed suspension of some concentrating mills in Gejiu of Yunnan province limited momentum in prices. Today, the contract will continue to trade rangebound at highs with pressure at 148,000 yuan/mt. 

SMM Morning Comments (Jan 15)

Price Review & Forecast 09:53:51AM Jan 15, 2019 Source:SMM

SHANGHAI, Jan 15 (SMM) –

Copper: LME copper faced pressure at the daily moving average after an unexpected decline in China’s exports reduced market confidence in global economic growth. With support at the 10-day moving average, LME copper closed at $5,912/mt with open interests down 278 lots to 287,000 lots. The SHFE 1903 contract also struggled around the daily moving average, to a low of 46,690 yuan/mt before it settled at 46,760 yuan/mt. We expect copper prices to hover at lows today with LME copper trading at $5,870-5,930/mt and the SHFE 1903 contract at 46,600-47,000 yuan/mt. On the last trading day for SHFE January contract today, traders will await offers over the SHFE 1902 contract in the spot market. 

Aluminium: LME aluminium extended declines further during the European trading session, and dipped to a low of $1,807/mt. It settled at $1,830/mt with open interests up 6,980 lots. We retain the view that weak fundamentals and falling costs will keep prices at lows in the medium term. It is likely to trade at $1,810-1,845/mt today, with the SHFE 1902 contract trading weakly at 13,200-13,300 yuan/mt. Spot offers are expected at a discount of 20 yuan/mt to a premium of 20 yuan/mt today. 

Zinc: Weak data on China’s trade surplus grew shorts in LME zinc, and weighed it to a low of $2,455.5/mt overnight. Support at the 10-day moving average, or the $2,450/mt level, pulled it from lows and closed at $2,472/mt. Continued pressure remained at the 20-day moving average. While LME zinc inventories extended their decline, prices saw limited support as macroeconomic sentiment weakened. We expect cautious investors to keep LME zinc to trading at $2,460-2,510/mt and the SHFE 1903 contract trading at 20,100-20,500 yuan/mt.  

Nickel: A buildup of shorts lowered LME nickel by 0.48% and dragged the SHFE 1905 contract by 0.21%. The $11,350/mt level provided support for LME nickel, while the contract found support at the five-day moving average. Today, we expect the contract to hover within 91,000-93,000 yuan/mt with its LME counterpart trading around $11,400/mt. Spot prices are set at 91,500-92,500 yuan/mt. 

Lead: LME lead came off after it rose to a high of $1,996/mt, and slid to a low of $1,965/mt during the European trading session. Support at the five-day moving average ended it at $1,980/mt, with open interests up 886 lots. It is likely to rebound from lows today and test resistance at the $2,000/mt level. The SHFE 1902 contract also found support at the five-day moving average, as it closed at 17,545 yuan/mt after consolidated around 17,480 yuan/mt. It is expected to cease falling and hover at current levels today. 

Tin: While most base metals dipped on concerns over global economic growth, LME tin traded robustly and jumped to a high of $20,555/mt, buoyed by lower supplies of Chines refined tin and smaller exports of Indonesia’s tin. It ended at $20,520/mt and could test pressure at $21,000/mt in the short run. The SHFE 1905 contract consolidated at highs but failed to break resistance at the 60-day moving average. The delayed suspension of some concentrating mills in Gejiu of Yunnan province limited momentum in prices. Today, the contract will continue to trade rangebound at highs with pressure at 148,000 yuan/mt.