SMM Morning Comments (Jun 13)

SHANGHAI, Jun 13 (SMM) –

Copper: As higher US crude inventories lowered crude prices, LME copper longs cut their positions and sent the three-month contract to a low of $5,826/mt on Wednesday before it closed the trading day 0.65% lower at $5,852.5/mt. Weaker LME copper prompted Shanghai copper shorts to add their positions overnight, pressuring the most active SHFE August contract to a low of 46,290 yuan/mt before the contract recovered some ground to close 0.6% lower at 46,420 yuan/mt. Lower oil prices, together with global trade tension, weighed on copper prices. With no major economic data slated for release, copper prices are expected to hold stable today. LME copper is expected to trade between $5,820-5,870/mt today, with SHFE copper at 46,200-46,700 yuan/mt. Spot premiums are seen lower at 20-80 yuan/mt as inflows of seaborne materials keep the market well-supplied.

Aluminium: Improved market sentiment bolstered three-month LME aluminium on Wednesday, towards the middle Bollinger band and closing 0.48% up at $1,786.5/mt. LME aluminium is expected to trade between $1,750-1,820/mt today. As longs aggressively loaded up their positions, the most traded SHFE August contract recovered from a lower open to close a tad higher at 13,985 yuan/mt overnight. SHFE aluminium recently hovered around the 14,000 yuan/mt level, and is expected to trade rangebound between 13,900-14,200 yuan/mt today. Spot premiums are seen at 10-30 yuan/mt over the June contract.

Zinc: Three-month LME zinc shed earlier gains to close 0.38% lower at $2,509.5/mt on Wednesday. LME zinc is expected to trade between $2,500-2,550/mt today, with the five-day moving average under scrutiny. The most active SHFE August contract partially recovered from earlier losses to end 0.15% lower at 20,350 yuan/mt overnight. While support is lined up at the five- and 20-day moving averages, expanding warrants would limit upside in SHFE zinc, which is expected to consolidate between 20,300-20,800 yuan/mt today.

Nickel: Lower crude prices weighed on nickel prices overnight. Three-month LME nickel came off from earlier highs to finish 0.46% lower at $11,845/mt on Wednesday, while the SHFE July contract reversed earlier gains to close marginally lower at 97,840 yuan/mt overnight. LME nickel is expected to trade between $11,700-11,950/mt today, with its SHFE counterpart at 96,800-98,200 yuan/mt. Spot prices are seen at 97,500-99,000 yuan/mt.

Lead: Pressure from the 60-day moving average forced three-month LME lead to relinquish earlier gains to end 0.94% lower at $1,892.5/mt on Wednesday. LME lead has yet to derail from an uptrend, but resistance is strong at the 60-day moving average. It is expected to remain rangebound in the short term, if it fails to register a substantial gain to break that level. As shorts trimmed their positions, the most traded SHFE July contract rebounded from a lower open overnight, ending 0.15% lower at 16,115 yuan/mt. Support is temporarily seen at the 10-day moving average.

Tin: Three-month LME tin rallied from a low of $18,770/mt to close at $19,255/mt on Wednesday, up 0.21% on the day. Support is seen at $18,500/mt while resistance is at $19,500/mt. The most active SHFE September contract recovered from earlier losses to close marginally higher at 145,310 yuan/mt overnight. Support is seen at 143,500 yuan/mt while resistance is at 146,000 yuan/mt.