SMM Morning Comments (Sep 30)

SHANGHAI, Sep 30 (SMM) – 

Copper: Prices of copper strengthened last Friday as a smaller-than-expected increase in US consumer spending data kept the greenback slightly lower and eased pressure on base metals. Three-month LME copper hit a high of $5,792/mt and ended up 0.72% at $5,762/mt, with the most-liquid SHFE November contract climbing above the 47,000 yuan/mt level to an intraday high of 47,160 yuan/mt, finishing 0.32% higher at 47,070 yuan/mt. The SHFE October, November contract again flipped to the backwardation structure with a price spread of around 20 yuan/mt. Investors should remain cautious about trade uncertainties and sluggish global growth limiting upsides of near-term copper prices. Today, the SHFE November contract is set to trade between 46,800-47,300 yuan/mt with LME copper at $5,730-5,790/mt. 

Aluminium: Three-month LME aluminium recovered from a low of $1,721.5/mt and finished 0.12% higher at $1,741/mt last Friday night, continuing to pare losses from the previous week. The most-active SHFE November contract ended down 0.32% at 13,925 yuan/mt, regaining losses after slipped to a low of 13,888 yuan/mt. Intensified risk aversion pre-holiday will see the contract hovering between 13,750-14,000 yuan/mt today, with LME aluminium at $1,730-1,780/mt. 

Zinc: Three-month LME zinc closed higher for the third consecutive session last Friday night as it finished up 0.87% at $2,309.5/mt, after a buildup in LME zinc inventories dragged it to lows around $2,305/mt. The most-traded SHFE November contract hovered rangebound with pressure from the daily moving average and closed flat at 18,720 yuan/mt, underpinned by lower domestic inventories of refined zinc amid pre-holiday stockpiling. Cautious investors may keep the contract between 18,500-19,000 yuan/mt today with LME zinc at $2,270-2,320/mt. 

Nickel: Three-month LME nickel continued its rangebound trend as it pulled back after climbed to a high of $17,425/mt, ending down 0.2% at $17,210/mt. The SHFE November contract found support from the 136,500 yuan/mt level and closed at 136,900 yuan/mt, down 0.02% on the day. The most-traded SHFE nickel contract shifted to the December contract. Prices are likely to remain rangebound the last trading day pre-holiday, with LME nickel facing resistance from the five- and 10- day moving averages. 

Lead: Three-month LME lead fell for the second straight session with a low of $2,067/mt last Friday night. Strong support remained from the 40-day moving average, and LME lead is seen testing that level today. The most-liquid SHFE November contract failed to shrug off pressure from 17,000 yuan/mt and ended down 0.12% at 16,890 yuan/mt. A limited inflow of capitals expected on the last trading day before the holiday is likely to keep the contract steady with pressure above from the 40-day moving average. 

Tin: A rise of 395 mt tin in LME inventories pushed three-month LME tin to a low of $16,065/mt, after it opened at $16,400/mt. It regained part of the losses and ended down at $16,160/mt, the third consecutive trading day of decline. Support below is seen from $16,000/mt today. The most-traded SHFE January 2020 contract followed a similar pattern and closed lower at 134,330 yuan/mt. It will trade with support from 134,000 yuan/mt today.