SMM Morning Comments (Sep 10)

Published: Sep 10, 2019 09:52 (GMT+8)

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Base metals closed mixed overnight with SHFE nickel leading the gains and surging 2.6%

SHANGHAI, Sep 10 (SMM) –

Copper: Prices of copper held at highs despite moderation, supported by higher crude oil prices on supply worries and a softened US dollar. Three-month LME copper ended some 0.24% lower at $5,814/mt, with the most-traded SHFE contract easing 0.27% to close at 47,290 yuan/mt. Prices could see a chance of rally as consumption recovers after the seasonal lull and China took more measures to boost the economy and improve liquidity. Today, LME copper is expected to trade between $5,800-5,850/mt, with SHFE November contract between 47,200-47,600 yuan/mt. Spot premiums are likely to firm at 110-140 yuan/mt.

Aluminium: Three-month LME aluminium surged during the Asian trading session on market talk that Indonesia will expedite its ban on bauxite exports. A lower US dollar again lifted LME aluminium after it slipped to around $1,777.5/mt, settling it 0.95% higher at $1,800/mt. The most-liquid SHFE November contract consolidated around the five-day moving average, supported by five straight weeks of declines in domestic primary aluminium inventories. It is seen trading between 14,300-14,400 yuan/mt today with LME aluminium at $1,750-1,820/mt.

Zinc: Three-month LME zinc fell for the second consecutive trading day as loaded-up shorts sent it down 0.8% to end at $2,305.5/mt. Any upward momentum in the prices could be limited as LME zinc inventories posted only slight declines. The most-liquid SHFE November contract ended some 0.1% higher at 19,015 yuan/mt. Limited upside room is expected today as investors looked at fundamentals. Today, the contract will trade between 18,800-19,300 yuan/mt with LME zinc between $2,280-2,330/mt.

Nickel: The most-liquid SHFE contract rallied overnight and shrugged off resistance from the five-day moving average to hit a high of 145,040 yuan/mt, before ended up 2.6% at 143,950 yuan/mt. Open interest expanded 15,000 lots to stand at 432,000 lots as longs loaded up their positions. Today, pressure above from the Bollinger upper band, or 146,000 yuan/mt, should be monitored. Three-month LME nickel also gained on its higher SHFE counterpart and a weaker US dollar. It closed 0.89% higher at $18,100/mt, after jumped to a high of $18,225/mt. Pressure above is seen from the Bollinger upper band, or the $18,400/mt level today.

Lead: Three-month LME lead continued its rally overnight as it climbed to a high of $2,097.5/mt and ended up 0.74% at $2,097/mt. It is expected to test pressure from $2,100/mt today. The most-traded SHFE October contract came off from highs and lose previous gains to close at 17,380 yuan/mt, down 0.52% on the day. Potential tighter environmental cuts on lead output may support near-term prices.

Tin: Three-month LME tin regained part of its losses and hover at highs as it recovered from a low of $17,030/mt, ending down $30/mt at $17,295/mt. Support below is expected from $17,000/mt today. The most-active SHFE 2001 contract grew 1,210 yuan/mt to finish at 140,490 yuan/mt, with a high of 141,300 yuan/mt. It returned above the 140,000 yuan/mt level and may find support below from 137,500 yuan/mt today.

Morning comments Futures movement

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