SMM Morning Comments (Aug 14)

SHANGHAI, Aug 14 (SMM) –

Copper: On the back of US announcement of tariff delays, three-month LME copper climbed to a 1-1/2-week high of $5,852/mt overnight, while the most active SHFE October contract rose to a two-week high of 46,960 yuan/mt. Open interest for the SHFE copper complex expanded 6,962 lots to 623,000 lots, with the load-up of long positions accounting for the majority of the growth. Overnight positive developments in US-China trade relationship are expected to continue to bolster copper prices today. LME copper is likely to trade between $5,800-5,855/mt, with SHFE copper at 46,500-47,000 yuan/mt. Spot premiums are seen slightly lower at 20-70 yuan/mt.

Aluminium: Three-month LME aluminium rallied from earlier lows to a high of $1,793/mt overnight, before it closed the day 0.88% higher at $1,785.5/mt. It is expected to trade between $1,750-1,850/mt today. The most traded SHFE October contract weakened to a low of 14,105 yuan/mt overnight, as China Hongqiao Group said the flooding caused by Typhoon Lekima had limited impact on its aluminium production. It later recovered some ground to end 0.21% lower at 14,155 yuan/mt. SHFE aluminium is unlikely to hand back all the gains from the recent rally, in view of a bullish prospect for the medium to long term. It is expected to trade between 14,100-14,200 yuan/mt today, with spot prices in a discount of 10 yuan/mt to a premium of 30 yuan/mt.

Zinc: Three-month LME zinc rapidly rose to a one-week high of $2,344.5/mt overnight, after hovering around $2,270/mt. It finished the trading day 2.62% higher at $2,330.5/mt, above the 10-day moving average. LME zinc is expected to consolidate between $2,300-2,350/mt today. The most active October contract followed its LME counterpart higher to a one-week high of 18,940 yuan/mt overnight, before it closed 0.88% higher at 18,855 yuan/mt. The recovery of yuan limited the gains in SHFE zinc. The contract is expected to trade between 18,700-19,200 yuan/mt today, with resistance from 19,000 yuan/mt under scrutiny.

Nickel: Three-month LME nickel rose to an intraday high of $15,985/mt overnight, before it eased to end the trading day 0.32% higher at $15,750/mt. Whether it could remain above the five-day moving average will come under scrutiny today. The most traded SHFE October contract weakened below the five-day moving average, losing 0.1% to end at 123,300 yuan/mt overnight. Resistance from 126,000 yuan/mt will come under scrutiny today.

Lead: Three-month LME lead rebounded from a low of $2,025.5/mt to a high of $2,083.5/mt overnight, before it ended the day 0.71% higher at $2,069.5/mt. The most active SHFE September recovered from earlier losses to close a tad lower at 16,740 yuan/mt overnight. Support is seen from the 20-day moving average.

Tin: News that US will delay its tariffs on Chinese goods accelerated gains in three-month LME tin overnight, which ended the trading day 1.39% higher at $17,120/mt. Support is seen at $16,500/mt, while resistance is at a previous high of $17,200/mt. The most traded SHFE September contract advanced 0.25% to end at 134,390 yuan/mt overnight. Support is seen at 132,000 yuan/mt, while resistance is at 134,500 yuan/mt where the five-20 day moving averages adhere to each other.