SMM Morning Comments (Feb 11)

Published: Feb 11, 2019 09:18

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SMM Morning Comments

SHANGHAI, Feb 11 (SMM) –

Chinese financial markets will have their first trading day today after the week-long Chinese New Year break.

Copper: LME copper rallied from a low of $6,090.5/mt on Monday to a high of $6,289.5/mt on Thursday, resulting in overall gains for the week. The Fed’s dovish tone and lower spot copper concentrate treatment charges underpinned copper prices. Post-holiday demand is likely to bolster copper prices. LME copper is expected to trade at $6,190-6,260/mt today with the SHFE 1903 contract at 48,100-48,550 yuan/mt. Spot discounts are seen up to 50 yuan/mt.

Aluminium: LME aluminium erased earlier gains to close near the day’s low on Friday, at $1,878/mt. It is expected to trade at $1,870-1,900/mt today.

Zinc: LME zinc came off from earlier highs and posted the first weekly decline last week after four consecutive weeks of gains. The contract ended at $2,699/mt last Friday. Even as low inventories continued to offer support, macroeconomic uncertainties prompted investors to be cautious. LME zinc is expected to trade rangebound today with a range of $2,670-2,720/mt. Losses in LME zinc, uncertain post-holiday consumption and anticipated gains in inventories are set to erode upward momentum in SHFE zinc and the SHFE 1903 contract is expected to trade at 21,850-22,400 yuan/mt today.

Nickel: LME nickel dropped to close at $12,575/mt on Friday and posted a weekly decline last week. As downstream consumption has yet to recover, nickel prices are expected to trade rangebound today. LME nickel is likely to trade at $12,400-12,600/mt with the SHFE 1905 contract at 99,300-100,000 yuan/mt. Spot prices are seen at 98,000-100,000 yuan/mt.

Lead: LME lead recovered from earlier losses to trade 0.5% higher at $2,089.5/mt on Friday. We expect downside room for the contract in the near term with pressure at the five- and 10-day moving averages.

Tin: LME tin finished last Friday 0.6% higher at $21,050/mt. Tighter supplies supported tin prices. LME tin faces resistance at the $21,000/mt level with next resistance at the $22,000/mt level. Gains in LME tin are expected to provide some support to its SHFE counterpart today.

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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