SMM Morning Comments (Feb 25)

Published: Feb 25, 2019 09:22

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SMM Morning Comments

SHANGHAI, Feb 25 (SMM) –

Copper: As longs aggressively loaded up their positions, the three-month LME copper climbed to a high of $6,485/mt on Friday before it ended the trading day at $6,477/mt. LME copper ‘s strong performance prompted longs in Shanghai to build positions, driving the most liquid SHFE April copper contract to open higher on Friday night. The contract ended at 50,320 yuan/mt. The US' decision to delay tariff hikes on Chinese goods buoyed Chinese offshore yuan and is set to boost commodities today. LME copper is expected to trade at $6,440-6,500/mt with SHFE copper at 50,000-50,500 yuan/mt. Spot discounts are seen at 230-100 yuan/mt as gains in prices of futures would fuel selling enthusiasm but erode purchasing interest.

Aluminium: After a lower open, the three-month LME aluminium climbed into positive territory to end at $1,918/mt on Friday. It is expected to trade at $1,900-1,920/mt today. The most liquid SHFE April contract opened higher and extended its gains to a high of 13,805 yuan/mt on Friday night. With shrinking trading volumes, the contract pulled back later in the session to end at 13,730 yuan/mt. It is expected to trade at 13,650-13,750 yuan/mt today with spot discounts at 90-50 yuan/mt.

Zinc: Weakness in the dollar and US-China trade optimism bolstered the three-month LME zinc on Friday, above the 20-day moving average to end at $2,712/mt. The anticipation of further declines in LME zinc inventories would offer strong support to LME zinc and the contract is expected to stay at highs today with a trading range of $2,680-2,730/mt. Riding on gains in its LME counterpart, the SHFE most-traded April contract climbed to end at 21,920 yuan/mt on Friday night. Expanding domestic inventories limited gains in SHFE zinc, with strong pressure at 22,000 yuan/mt. The SHFE 1904 contract is expected to trade at 21,500-22,000 yuan/mt today.

Nickel: With declines in the greenback and gains in crude prices, the three-month LME nickel climbed to a high of $13,100/mt on Friday, before it pared some gains to close at $12,990/mt. After a higher open, the most liquid SHFE May nickel contract weakened to end at 102,600 yuan/mt on Friday night. Nickel prices are expected to inch up today. LME nickel is likely to trade $12,900-13,100/mt with SHFE nickel at 102,000-103,500 yuan/mt. Spot prices are seen at 102,500-103,500 yuan/mt.

Lead: The three-month LME lead came off from a high of $2,078/mt on Friday and closed the trading day lower at $2,063/mt. Pressure was strong at the 20-day moving average. LME lead is expected to remain rangebound in the short run. The most-traded SHFE April contract climbed to end Friday night higher at 17,110 yuan/mt after initial declines to a low of 16,970 yuan/mt. Shorts still dominated the market.

Tin: The three-month LME tin rose to close at the day-high of $21,550/mt on Friday. Low LME tin inventories and strong support at the five-day moving average are expected to keep LME tin at highs in the near term. The most liquid SHFE May contract inched up to finish Friday night at 150,340 yuan/mt.

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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