SMM Morning Comments (Jul 19)

SHANGHAI, Jul 19 (SMM) – 

Copper: Prices of copper eased after climbed to highs overnight as the US dollar again slid on dovish comments by New York Federal Reserve President. Expectations for Fed rate cuts will support copper prices in the short term, but prices still lack a strong upward momentum. Three-month LME copper came off from a high of $6,000/mt and ended lower last night, and the most-liquid SHFE September contract fell to around 46,850 yuan/mt after tested the 47,000 yuan/mt level. Underpinned by several moving averages below, the contract is expected to trade between 46,600-47,100 yuan/mt today, with LME copper at $5,960-6,010/mt. Spot offers may weaken to flat to a premium of 70 yuan/mt as sellers try to cash in amid sufficient supplies. 

Aluminium: Three-month LME aluminium registered the sixth consecutive trading day of increase as it climbed to a high of $1,857/mt after the US dollar weakened, settling up 0.22% at $1,851/mt. With the KDJ indicators moving upwards, it is expected to trade between $1,800-1,860/mt today. The most-active SHFE September contract eased from a high of 13,930 yuan/mt and finished 0.25% higher on the day at 13,895 yuan/mt, with growth in the KDJ indicators slowed. Trades today may occur at 13,800-13,950 yuan/mt. 

Zinc: Three-month LME zinc unsuccessfully tested pressure from $2,500/mt and finished 0.61% lower on the day at $2,457/mt, as expectations of greater arrivals at warehouses capped the upward momentum in prices. With support from the 20-day moving average, it is likely to trade between $2,440-2,490/mt today. The most-active SHFE September contract faced pressure from the 40-day moving average and also settled lower by 1.05% to 19,395 yuan/mt. Trading range is expected at 19,150-19,650 yuan/mt today with limited upward strength. 

Nickel: Three-month LME nickel extended its rally and rose for the 12th straight day as it shrugged off pressure from the $15,000/mt level, to a high of $15,115/mt, ending up 3.97% at $14,945/mt. The most-liquid SHFE contract climbed to the highest since July 2018, at 118,870 yuan/mt, before it settled 3.2% higher at 117,530 yuan/mt. The contract is expected to test resistance from 119,000 yuan/mt today, with its LME counterpart facing pressure from $16,000/mt. 

Lead: As LME lead inventories continued to shrink, three-month LME lead climbed to a high of $2,048.5/mt and closed higher for the eighth straight day, at $2,037.5/mt, up 1.57%. The most-liquid SHFE September contract slowed its increases and pared some gains to end at 16,520 yuan/mt, up 0.46% on the day. Hesitated longs may drive the contract lower, with LME lead testing pressure above today. 

Tin: Three-month LME tin lost gains from the Asian trading hours and fell to a low of $17,770/mt, closing some 0.6% lower at $17,830/mt. The most-active SHFE September contract slipped from a high of 135,010 yuan/mt but found support from the five-day moving average, ending 0.2% lower at 134,920 yuan/mt. It is expected to trade with support from 132,000 yuan/mt, with LME tin testing support from $17,500/mt today.