SMM Morning Comments (Apr 16)-Shanghai Metals Market

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SMM Morning Comments (Apr 16)

Price Review & Forecast 09:33:26AM Apr 16, 2019 Source:SMM

SHANGHAI, Apr 16 (SMM) –

Copper: Three-month LME copper fell to a low of $6,452/mt before it pared some losses to close 0.2% lower at $6,489/mt. Dragged by its LME counterpart, the most active SHFE May contract weakened before short-covering bolstered it to recover some losses to end close to 0.2% lower at 49,430 yuan/mt overnight. Copper prices are expected to trade ranegbound today as traders found limited guidance from a lack of economic data slated for release. LME copper is expected to trade between $6,470-6,520/mt with SHFE copper at 49,250-49,700 yuan/mt. Spot spreads are seen at a discount of 50 yuan/mt to a premium of 70 yuan/mt. The anticipation of tighter supply prompts spot sellers to hold offers firm, which is set narrow spot discounts.

Aluminium: Three-month LME aluminium fluctuated to close marginally lower at $1,863/mt on Monday. In the face of the rebounding dollar, LME aluminium has limited steam and is expected to trade between $1,840-1,880/mt today. The most traded SHFE May contract traded in a narrow range and closed 0.1% lower at 13,840 yuan/mt overnight. It is expected to trade at 13,800-13,900 yuan/mt today. Spot discounts are seen at 50-10 yuan/mt after the April contract expired.

Zinc: As LME zinc inventories gained almost 4,000 mt on the day, three-month LME zinc failed to hold onto its earlier gains to finish the trading day close to 1% lower at $2,897/mt. As the monthly delivery of cargoes under LME contracts approaches, the backwardation structure on LME zinc rapidly widened, resulting in higher social inventories, which is set to weigh on LME zinc prices. LME zinc is expected to hover around moving averages and trade between $2,875-2,930/mt today. With a weak LME counterpart, the most active SHFE June contract opened lower and weakened to close down some 0.9% at 22,290 yuan/mt overnight. Traders were keen to build positions in forward contracts, and this widened spreads between contracts. High inventories and possible restarts of idle capacity weakened the inclination to go long. SHFE zinc is expected to trade between the 10- and 20-day moving averages today with a trading range of 22,100-22,550 yuan/mt.

Nickel: Three-month LME nickel fluctuated to finish Monday 0.15% lower at $13,000/mt. The most traded SHFE June contract rapidly rebounded after midnight, recovering from much of earlier losses to end slightly lower at 101,120 yuan/mt overnight. LME nickel is expected to trade rangebound between $12,850-13,050/mt today with SHFE nickel at 100,000-102,000 yuan/mt. Spot prices are seen at 101,000-103,500 yuan/mt.

Lead: Institutional funds helped three-month LME lead rebound from earlier lows above the daily moving average and end close to 1% higher at $1,951/mt on Monday. Lower inventories accounted for the rebound in LME lead in the past two trading days, but it continues to face pressure from moving averages. LME lead is expected to trade rangebound at lows in the short run. The rally in LME lead bolstered its SHFE counterpart to recover from earlier losses overnight. The most active SHFE June contract climbed from earlier lows of 16,335 yaun/mt to close 0.7% higher at 16,455 yuan/mt. Traders were keen to buy at lows. SHFE lead is expected to hover at lows in the short term.

Tin: After hovering around $20,775/mt during Asian hours, three-month LME tin fell to a low of $20,580/mt during European trading hours before it recovered some losses to end 0.4% lower at $20,620/mt on Monday. Overall strength in the dollar and gains in LME tin inventories weighed on LME tin prices, Support is seen at $20,500/mt. The September contract became the most liquid SHFE tin contract overnight. The contract weakened overnight, ending at 148,900 yuan/mt. Resistance lies at 150,000 yuan/mt with support at 148,000 yuan/mt.

Key Words:  Morning comments  Copper  Aluminium  Zinc  Lead  Nickel  Tin 

SMM Morning Comments (Apr 16)

Price Review & Forecast 09:33:26AM Apr 16, 2019 Source:SMM

SHANGHAI, Apr 16 (SMM) –

Copper: Three-month LME copper fell to a low of $6,452/mt before it pared some losses to close 0.2% lower at $6,489/mt. Dragged by its LME counterpart, the most active SHFE May contract weakened before short-covering bolstered it to recover some losses to end close to 0.2% lower at 49,430 yuan/mt overnight. Copper prices are expected to trade ranegbound today as traders found limited guidance from a lack of economic data slated for release. LME copper is expected to trade between $6,470-6,520/mt with SHFE copper at 49,250-49,700 yuan/mt. Spot spreads are seen at a discount of 50 yuan/mt to a premium of 70 yuan/mt. The anticipation of tighter supply prompts spot sellers to hold offers firm, which is set narrow spot discounts.

Aluminium: Three-month LME aluminium fluctuated to close marginally lower at $1,863/mt on Monday. In the face of the rebounding dollar, LME aluminium has limited steam and is expected to trade between $1,840-1,880/mt today. The most traded SHFE May contract traded in a narrow range and closed 0.1% lower at 13,840 yuan/mt overnight. It is expected to trade at 13,800-13,900 yuan/mt today. Spot discounts are seen at 50-10 yuan/mt after the April contract expired.

Zinc: As LME zinc inventories gained almost 4,000 mt on the day, three-month LME zinc failed to hold onto its earlier gains to finish the trading day close to 1% lower at $2,897/mt. As the monthly delivery of cargoes under LME contracts approaches, the backwardation structure on LME zinc rapidly widened, resulting in higher social inventories, which is set to weigh on LME zinc prices. LME zinc is expected to hover around moving averages and trade between $2,875-2,930/mt today. With a weak LME counterpart, the most active SHFE June contract opened lower and weakened to close down some 0.9% at 22,290 yuan/mt overnight. Traders were keen to build positions in forward contracts, and this widened spreads between contracts. High inventories and possible restarts of idle capacity weakened the inclination to go long. SHFE zinc is expected to trade between the 10- and 20-day moving averages today with a trading range of 22,100-22,550 yuan/mt.

Nickel: Three-month LME nickel fluctuated to finish Monday 0.15% lower at $13,000/mt. The most traded SHFE June contract rapidly rebounded after midnight, recovering from much of earlier losses to end slightly lower at 101,120 yuan/mt overnight. LME nickel is expected to trade rangebound between $12,850-13,050/mt today with SHFE nickel at 100,000-102,000 yuan/mt. Spot prices are seen at 101,000-103,500 yuan/mt.

Lead: Institutional funds helped three-month LME lead rebound from earlier lows above the daily moving average and end close to 1% higher at $1,951/mt on Monday. Lower inventories accounted for the rebound in LME lead in the past two trading days, but it continues to face pressure from moving averages. LME lead is expected to trade rangebound at lows in the short run. The rally in LME lead bolstered its SHFE counterpart to recover from earlier losses overnight. The most active SHFE June contract climbed from earlier lows of 16,335 yaun/mt to close 0.7% higher at 16,455 yuan/mt. Traders were keen to buy at lows. SHFE lead is expected to hover at lows in the short term.

Tin: After hovering around $20,775/mt during Asian hours, three-month LME tin fell to a low of $20,580/mt during European trading hours before it recovered some losses to end 0.4% lower at $20,620/mt on Monday. Overall strength in the dollar and gains in LME tin inventories weighed on LME tin prices, Support is seen at $20,500/mt. The September contract became the most liquid SHFE tin contract overnight. The contract weakened overnight, ending at 148,900 yuan/mt. Resistance lies at 150,000 yuan/mt with support at 148,000 yuan/mt.

Key Words:  Morning comments  Copper  Aluminium  Zinc  Lead  Nickel  Tin