SMM Morning Comments (Feb 21)

Published: Feb 21, 2019 09:38

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SMM Morning Comments

SHANGHAI, Feb 21 (SMM) –

Copper: As US crude prices rose for six consecutive sessions, three-month LME copper hit a high of $6,426.5/mt on Wednesda and ended at $6,425/mt. The SHFE 1904 contract rose past the 50,000 yuan/mt level to a high of 50,040 yuan/mt overnight, closing at 49,980 yuan/mt. LME copper is expected to trade at $6,380-6,450/mt today with SHFE copper at 49,700-50,200 yuan/mt. Spot discounts are seen at 200-60 yuan/mt. Sellers were keen to hold offers firm yesterday as prices of futures extended gains.

Aluminium: The three-month LME aluminium contract advanced some 1% to end Wednesday at $1,876/mt, and is expected to trade at $1,850-1,880/mt today. The SHFE 1904 contract inched up 0.3% and closed at 13,530 yuan/mt overnight, and is likely to trade at 13,450-13,550 yuan/mt today. Spot discounts are seen at 80-40 yuan/mt.

Zinc: Further losses in LME zinc inventories and the decline in the US dollar ahead of the Fed minutes bolstered the three-month LME zinc contract to a high of $2,708/mt on Wednesday, which ended at $2,698/mt. With the impact of the positive developments fading, LME zinc is likely to stage a correction today and trade between $2,670-2,720/mt. The SHFE 1904 contract climbed to close at 21,680 yuan/mt overnight as gains in its LME counterpart drove longs to load up their positions. Rising inventories domestically, due to seasonality, are set to limit upward momentum in SHFE zinc, which is expected to trade at 21,450-21,900 yuan/mt today.

Nickel: The three-month LME nickel contract climbed close to 2% to end Wednesday at $12,910/mt. The SHFE 1905 contract gained 1.5% overnight and ended at 101,450 yuan/mt. Earlier losses in the US dollar and recent gains in crude prices contributed to the increases in nickel prices. Nickel prices are expected to extend their gains today as US and Chinese trade negotiators will kick off their new round of talks in Washington later today. LME nickel is expected to trade at $12,800-13,000/mt with SHFE nickel at 101,000-102,000 yuan/mt. Spot prices are seen at 101,000-102,000 yuan/mt.

Lead: While LME lead inventories continued to rebound, the three-month LME lead contract rose on Wednesday as the US dollar fell earlier in the session. LME lead ended the trading day 1.3% higher at $2,046.5/mt, paring losses in the previous day. The SHFE 1904 contract recovered from earlier lows to close overnight 0.4% higher at 16,865 yuan/mt.

Tin: The three-month LME tin continued its rangebound pattern on Wednesday, ending the trading day 0.5% higher at $21,255/mt. LME tin inventories further shrank, which would likely support LME tin in the near term. Resistance is seen at $21,300/mt. The SHFE 1905 contract ended overnight at 150,620 yuan/mt after seeing an earlier low of 150,410 yuan/mt. SHFE tin is expected to trade rangebound in the short run.

Morning comments Copper Aluminium Zinc Lead Nickel Tin

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