SMM Morning Comments (Feb 13)-Shanghai Metals Market

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SMM Morning Comments (Feb 13)

Price Review & Forecast 09:30:12AM Feb 13, 2019 Source:SMM

SHANGHAI, Feb 13 (SMM) –

Copper: LME copper rebounded from a low of $6,085/mt on Tuesday, closing the day lower at $6,123/mt. The SHFE 1904 contract traded lower overnight, ending at 48,120 yuan/mt. The losses in US dollar and gains in crude prices are expected to support copper prices in the near term. Recovering demand with downstream consumers returning from the holiday is also supportive of copper prices. LME copper is expected to trade at $6,110-6,185/mt today with SHFE copper at 48,000-48,500 yuan/mt. Spot prices are seen at discounts of 40 yuan/mt to premiums of 20 yuan/mt.

Aluminium: LME aluminium dropped to close at $1,855/mt on Tuesday. Despite the dip on Tuesday, the US dollar is still at highs and this would continue to weigh on aluminium prices. LME aluminium is expected to trade at $1,800-1,870/mt today. The SHFE 1903 contract fluctuated to close lower at 13,335 yuan/mt overnight. It is expected to trade at 13,300-13,500 yuan/mt today with spot discounts at 70-30 yuan/mt against the 1902 contract.

Zinc: LME zinc slid to close at $2,610/mt on Tuesday after hovering around $2,640/mt earlier in the day. This forced it to post a three-day losing streak. As bearish sentiment lingers, LME zinc is expected to trade at $2,590-2,640/mt today. The decline in LME zinc prompted longs to cut and shorts to add their positions on the SHFE, driving the 1903 contract to finish overnight 1.2% lower at 21,365 yuan/mt. As post-holiday consumption has yet to pick up, SHFE zinc is unlikely to rebound in the short run and is expected to trade at 21,200-21,700 yuan/mt today.

Nickel: LME nickel tumbled to a low of $12,210/mt from a high of $12,575/mt on Tuesday. It then recovered some losses to finish the trading day lower at $12,390/mt. The SHFE 1905 contract rebounded to close at 98,190 yuan/mt overnight after it fell through the five- and 10-day moving averages to a low of 97,100 yuan/mt. It lost over 1% overnight. LME nickel is expected to trade rangebound at $12,200-12,500/mt today with the SHFE 1905 contract at 97,500-99,000 yuan/mt. Spot prices are seen at 97,500-99,000 yuan/mt.

Lead: LME lead rallied from the day-low of $2,028/mt during European trading hours to end Tuesday higher at $2,049/mt. This suggested strong divergence between shorts and longs. Earlier losses in LME lead weighed on its SHFE counterpart overnight, which posted another drop after substantial losses at the start of the week. The SHFE 1903 contract tumbled 1.8% to close at 16,560 yuan/mt. Bearish sentiment dominated the market. Despite the potential for a rally after significant losses, the contract continues to face strong downward pressure.

Tin: LME tin remained at highs on Tuesday and ended lower at $20,950/mt. Tighter supplies provided support, while resistance is seen at $21,000/mt. As longs took profits, the SHFE 1905 contract fell past the five- and 10-day moving averages to close near the 20-day moving average. It lost close to 1% to end at 148,350 yuan/mt. Holiday impact grew the pressure from inventories. SHFE tin is likely to weaken in the near term with support at 147,000 yuan/mt.

Key Words:  Morning comments   Copper   Aluminium   Zinc   Lead   Nickel   Tin 

SMM Morning Comments (Feb 13)

Price Review & Forecast 09:30:12AM Feb 13, 2019 Source:SMM

SHANGHAI, Feb 13 (SMM) –

Copper: LME copper rebounded from a low of $6,085/mt on Tuesday, closing the day lower at $6,123/mt. The SHFE 1904 contract traded lower overnight, ending at 48,120 yuan/mt. The losses in US dollar and gains in crude prices are expected to support copper prices in the near term. Recovering demand with downstream consumers returning from the holiday is also supportive of copper prices. LME copper is expected to trade at $6,110-6,185/mt today with SHFE copper at 48,000-48,500 yuan/mt. Spot prices are seen at discounts of 40 yuan/mt to premiums of 20 yuan/mt.

Aluminium: LME aluminium dropped to close at $1,855/mt on Tuesday. Despite the dip on Tuesday, the US dollar is still at highs and this would continue to weigh on aluminium prices. LME aluminium is expected to trade at $1,800-1,870/mt today. The SHFE 1903 contract fluctuated to close lower at 13,335 yuan/mt overnight. It is expected to trade at 13,300-13,500 yuan/mt today with spot discounts at 70-30 yuan/mt against the 1902 contract.

Zinc: LME zinc slid to close at $2,610/mt on Tuesday after hovering around $2,640/mt earlier in the day. This forced it to post a three-day losing streak. As bearish sentiment lingers, LME zinc is expected to trade at $2,590-2,640/mt today. The decline in LME zinc prompted longs to cut and shorts to add their positions on the SHFE, driving the 1903 contract to finish overnight 1.2% lower at 21,365 yuan/mt. As post-holiday consumption has yet to pick up, SHFE zinc is unlikely to rebound in the short run and is expected to trade at 21,200-21,700 yuan/mt today.

Nickel: LME nickel tumbled to a low of $12,210/mt from a high of $12,575/mt on Tuesday. It then recovered some losses to finish the trading day lower at $12,390/mt. The SHFE 1905 contract rebounded to close at 98,190 yuan/mt overnight after it fell through the five- and 10-day moving averages to a low of 97,100 yuan/mt. It lost over 1% overnight. LME nickel is expected to trade rangebound at $12,200-12,500/mt today with the SHFE 1905 contract at 97,500-99,000 yuan/mt. Spot prices are seen at 97,500-99,000 yuan/mt.

Lead: LME lead rallied from the day-low of $2,028/mt during European trading hours to end Tuesday higher at $2,049/mt. This suggested strong divergence between shorts and longs. Earlier losses in LME lead weighed on its SHFE counterpart overnight, which posted another drop after substantial losses at the start of the week. The SHFE 1903 contract tumbled 1.8% to close at 16,560 yuan/mt. Bearish sentiment dominated the market. Despite the potential for a rally after significant losses, the contract continues to face strong downward pressure.

Tin: LME tin remained at highs on Tuesday and ended lower at $20,950/mt. Tighter supplies provided support, while resistance is seen at $21,000/mt. As longs took profits, the SHFE 1905 contract fell past the five- and 10-day moving averages to close near the 20-day moving average. It lost close to 1% to end at 148,350 yuan/mt. Holiday impact grew the pressure from inventories. SHFE tin is likely to weaken in the near term with support at 147,000 yuan/mt.

Key Words:  Morning comments   Copper   Aluminium   Zinc   Lead   Nickel   Tin