SMM Morning Comments (Aug 20)

SHANGHAI, Aug 20 (SMM) – 

Copper: Prices of copper hovered rangebound without buoyance from macroeconomic development. Lower-than-expected eurozone consumer price index for July reinforced worries about slower global growth, which is set to pressure copper prices. Three-month LME copper traded around the $5,760/mt level overnight, ending up 0.3%, with the most-liquid SHFE copper closing some 0.4% higher on the day. Pressure above from the 40-day moving average and a limited sign of improvement from technical indicators may keep the contract between 46,400-46,800 yuan/mt today. LME copper is seen trading at $5,730-5,780/mt. 

Aluminium: Market talk about domestic production suspension in Xinjiang on accident sent the most-liquid SHFE October contract to a more than a-year high of 14,455 yuan/mt, before it closed 0.8% higher on the day at 14,390 yuan/mt. Three-month LME aluminium retreated after a higher SHFE aluminium drove it to a high of $1,807.5/mt. It returned back below $1,800/mt and ended at $1,792/mt, down 0.2% on the day. Today, it is seen trading between $1,790-1,810/mt, with the October contract at 14,300-14,500 yuan/mt. 

Zinc: Three-month LME zinc unsuccessfully tested pressure from the daily moving average with a high of $2,268/mt, ending down 0.51% at $2,256/mt, as declines in LME zinc inventories missed expectations. Currently above the Bollinger lower band, with resistance from the five- and 10- day moving averages, LME zinc is likely to trade between $2,330-2,380/mt today. The most-liquid SHFE October contract regained losses from the daytime session and climbed to a high of 18,725 yuan/mt, settling 0.11% higher on the day at 18,630 yuan/mt. Pressure above from the 19,000 yuan/mt level will keep prices between 18,300-18,900 yuan/mt today. 

Nickel: Three-month LME nickel fell below support from the five-day moving average, or the $16,000/mt level, to a low of $15,795/mt, before it pared some losses and closed 1.45% lower on the day at $15,950/mt. The most-active SHFE October contract also slipped below the five-day moving average, and support from the 10-day moving average ended it some 0.8% lower at 124,930 yuan/mt. Today, support from the 10-day moving average should be closely monitored. 

Lead: Three-month LME lead continued to hover rangebound at highs and closed 1.01% higher on the day at $2,054.5/mt after it rallied from a low of $2,022/mt to a high of $2,059.5/mt. Funds support may extend its upside room today. The most-liquid SHFE September contract drifted lower overnight but remained on track to climb on the day, as it finished at 16,755 yuan/mt, up 0.36%. Pressure above from 16,900-17,000 yuan/mt should be watched today. 

Tin: Three-month LME tin remained below all moving averages even as it rebounded from a low of $16,255/mt during European trading session as LME tin inventories shrank some 20 mt to stand at 6,315 mt. It closed more than 1% lower on the day at $16,365/mt, with support below expected from $16,000/mt. The dominant SHFE tin contract moved to the 2001 contract, for January 2020 delivery. It regained part of the losses with a high of 131,490 yuan/mt, closing 0.1% lower on the day at 131,240 yuan/mt. Support below is seen from 130,000 yuan/mt.