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SMM Morning Comments (Mar 18)
Mar 18,2019 09:40CST
price review forecast
SMM Morning Comments

SHANGHAI, Mar 18 (SMM) – 

Copper: LME copper rebounded from a low of $6,392/mt to a high of $6,444/mt, as shorts exited after weak US manufacturing data dragged on the greenback. The SHFE 1905 contract also rallied after dropped, with support from the daily moving average. It tested resistance for several times at the 49,180 yuan/mt level, and ended at 49,100 yuan/mt. With pressure above from the five-, 10-, and 20-day moving averages, LME copper is likely to trade at $6,400-645/mt, with the SHFE 1905 contract at 49,000-49,500 yuan/mt today. Spot premiums are set at 800-1,000 yuan/mt today as news about tax cut lowered the April contract. 

Aluminium: LME aluminium fluctuated with the SHFE 1905 contract and dropped to $1,900/mt during the Asian trading session. A lower US dollar lifted LME aluminium to $1,904/mt, and settled it at $1,896/mt. With the K-line indicator testing support at the 20-day moving average below, LME aluminium is expected to trade at $1,860-1,930/mt today. The SHFE 1905 contract is likely to trade at 13,500-13,800 yuan/mt today with spot premiums at 200-240 yuan/mt. 

Zinc: Optimism around China’s value-added tax cut bolstered LME zinc to a year’s high of $2,882/mt. It dipped to trade rangebound around $2,790/mt during the European trading session as bullish sentiment eased and as investors expected a lower VAT rate to reduce costs in back month contracts. With falling inventories across LME warehouses and pressure from the five-day moving average, LME zinc may trade at $2,770-2,850/mt today. The SHFE 1905 contract rebounded after it declined last Friday night, and closed at 21,690 yuan/mt. Fundamentals are likely to see it around 21,400-21800 yuan/mt today. 

Nickel: Macroeconomic development buoyed LME nickel to a high of $13,045/mt, before pressure from the 20-day moving average and the $13,000/mt level ended it at $12,935/mt. LME nickel inventories continued to shrink by 1,362 mt to 191,340 mt. The SHFE 1905 contract faced resistance from the five-day moving average, after it rose to a high of 100,950 yuan/mt. Support was at the 100,000 yuan/mt level. It is likely to trade at 99,500-101,500 yuan/mt with its LME counterpart at $12,900-13,100/mt today. Spot prices are set at 100,500-102,500 yuan/mt.

Lead: LME lead fell below support from the 40-day moving average as it dipped to a low of $2,062/mt before closed at $2,063/mt. Further downside room is expected in the prices, but current low LME lead inventories will cap any decline. The SHFE 1905 contract slid below all moving averages as its LME counterpart weakened. It ended at 17,010 yuan/mt last Friday night, and may test support below today. 

Tin: LME tin traded around the five- and 40-day moving averages with pressure from the 10-day moving average. It closed at the lowest last Friday night, at $21,100/mt after slid from a high of $21,275/mt. The SHFE 1905 contract traded rangebound around the five-day moving average, with a low of 146,600 yuan/mt. It will extend the rangebound trend today with pressure from 148,500 yuan/mt, and support from 146,000 yuan/mt. 

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