SMM Morning Comments (Jun 14)

SHANGHAI, Jun 14 (SMM) –

Copper: Copper prices rebounded on concerns over Chilean supply and higher crude prices, but global developments limited gains. As shorts covered their positions, three-month LME copper rallied to close 0.19% higher at $5,863.5/mt on Thursday. Bolstered by its LME counterpart, the most active SHFE August contract rose overnight, gaining 0.32% to close at 46,530 yuan/mt. Copper prices are expected to trade rangebound today ahead of the Fed meeting next week. LME copper is expected to trade between $5,830-5,880/mt today, with SHFE copper at 46,200-46,700 yuan/mt. Spot premiums are seen at 40-90 yuan/mt.

Aluminium: As the US dollar rose, three-month LME aluminium relinquished earlier gains to close lower at $1,786/mt on Thursday. The most traded SHFE August contract reversed earlier gains and fell below the five-day moving average to close 0.32% lower at 13,910 yuan/mt overnight. SHFE aluminium continued its rangebound pattern and is expected to hover between 13,800-14,200 yuan/mt today, with spot premiums of up to 20 yuan/mt over the June contract.

Zinc: Three-month LME zinc fell for a second straight day on Thursday, losing 1.33% to close at $2,476/mt. LME cash zinc premiums expanded to $148.5/mt, which renewed the expectations of higher inventories. This, together with technical resistance, is expected to keep LME zinc under pressure. LME zinc is expected to hover around the five- and 10-day moving average today, with most transactions at $2,450-2,500/mt. With pressure from the five- and 20-day moving averages, the most active SHFE August contract dropped below the 10-day moving average, down 0.76% to end at 20,145 yuan/mt overnight. The spread between the June and July contract widened to 695 yuan/mt as high open interest and low warrants ahead of delivery drove shorts in the June contract to cover positions. The SHFE 1908 contract is expected to perform weakly at the 20-day moving average today, trading between 20,000-20,500 yuan/mt.

Nickel: Three-month LME nickel climbed above $12,000/mt on Thursday before it pared all gains to close the trading day flat at $11,845/mt. The SHFE July contract held onto its Thursday gains overnight, up 1.25% to close at 99,630 yuan/mt. LME nickel is expected to trade rangebound between $11,750-11,950/mt today, while SHFE nickel is likely to hover above the 60-day moving average as high as 99,000 yuan/mt. Spot prices are seen at 98,0000-100,000 yuan/mt.

Lead: Three-month LME lead rebounded from a low of $1,874/mt to close flat at $1,892.5/mt on Thursday. LME lead remained rangebound at highs, with support from the five-day moving average. The most active SHFE July contract partially recovered from earlier losses to close 0.16% lower at 16,060 yuan/mt overnight. SHFE lead recently hovered around 16,050 yuan/mt, with a narrower trading range.

Tin: Three-month LME tin hit a high of $19,460/mt before it closed 0.42% higher at $19,335/mt on Thursday. Support is seen at $19,000/mt while resistance is at the 40-day moving average as high as $19,500/mt. The most traded SHFE September contract climbed to a high of 146,000 yuan/mt before it shed most of those gains to close marginally higher at 145,350 yuan/mt. Support is seen from the 10- and 20-day moving averages as low as 144,800 yuan/mt, while resistance is from the 40-day moving average as high as 146,000 yuan/mt.