SMM Morning Comments (Sep 11)

SHANGHAI, Sep 11 (SMM) – 

Copper: Both three-month LME copper and the most-traded SHFE November contract climbed after opened at lows, as investors’ risk aversion eased on expectations of the September-October peak demand season for industrial metals. LME copper still ended lower for the third consecutive trading day by 0.09% and finished at $5,809/mt, with its SHFE counterpart closing at 47,320 yuan/mt, down 0.23%. With support below from the five-day moving average, the contract is likely to trade between 47,000-47,500 yuan/mt, with LME copper between $5,780-5,820/mt. Spot premiums will be firm at 110-140 yuan/mt as sellers are bullish about downstream consumption before the mid-autumn festival holiday on Friday. 

Aluminium: Three-month LME aluminium moved higher to touch the highest level since July 26, at $1,825/mt, before it gave up some gains and closed 1.19% higher at $1,821.5/mt. It has shrugged off pressure from the Bollinger upper band, and may trade between $1,780-1,830/mt today. Loaded-up longs buoyed the most-active SHFE November contract to highs around 14,410 yuan/mt, before it closed at 14,390 yuan/mt, up 0.24% on the day. The K-indicator is expected to continue to move along the five-day moving average, and keep the contract between 13,350-14,450 yuan/mt today. 

Zinc: Three-month LME zinc found support from the 10-day moving average and recovered from a low of $2,282.5/mt, to hit a high of $2,350/mt, before ended up 1.4% at $2,343/mt. The KDJ indicators expanded upwards and LME zinc inventories continued to shrink, which may give the prices slight upward momentum and keep them between $2,300-2,350/mt today. The most-active SHFE November contract also traded robustly as it jumped above the 19,000 yuan/mt level and the 60-day moving average, to a high of 19,205 yuan/mt, ending up 1.05% at 19,185 yuan/mt. However, its upside room could be capped on anticipations of a supply recovery. Trading range is seen at 18,900-19,400 yuan/mt today. 

Nickel: Three-month LME nickel lost 0.83% overnight and closed at $17,950/mt, after a rebound in US dollar sent it down below the $18,000/mt level. It stayed above the five-day moving average, and may continue to test support from that level today. The most-active SHFE contract traded within a broad range and finished 0.2% lower at 143,800 yuan/mt. Resistance above from 145,000 yuan/mt should be monitored today. 

Lead: Three-month LME lead pared some previous gains after it climbed to a high of $2,110/mt, ending down 0.33% at $2,090/mt. Pressure from the $2,100/mt level was heavy, and should be closely watched today. The most-liquid SHFE October contract remained at highs but with limited upward momentum, ending slightly higher at 17,410 yuan/mt. Investors should remain cautious about prices coming off from highs in the near term. 

Tin: Prices of tin consolidated at highs overnight with three-month LME tin gaining $130/mt to close at $17,425/mt, and the most-active SHFE 2001 contract easing 310 yuan/mt to 140,460 yuan/mt. LME tin is expected to trade with support from $17,000/mt and resistance from $17,500/mt, or the 60-day moving average today. Support for the SHFE contract is seen from 138,000 yuan/mt, with resistance above from 141,000 yuan/mt.