SHANGHAI, Oct 15 (SMM) –
Copper: Three-month recovered from earlier losses to close 0.29% higher at $5,820/mt on Monday, while the most active SHFE 1912 contract clawed back losses from a lower open to end a tad lower at 47,020 yuan/mt. Earlier losses in copper prices suggested that caution has returned to the markets after investors digested positive signals from US-China trade talks and Brexit. Lingering uncertainty surrounding trade talks and Brexit, and a slowing global economy kept investors worried about demand outlook, and hampered upside potential in copper prices. Copper prices are expected to cling to their recent highs today, with LME copper at $5,780-5,840/mt. SHFE copper is expected to move between 46,700-47,300 yuan/mt. Spot premiums are seen at 60-100 yuan/mt, as recent large inflows of seaborne materials deter sellers from hiking their offers.
Aluminium: Three-month LME aluminium dropped to a one-week low of $1,710/mt on Monday, before it recovered some ground to finish the trading day 0.17% lower at $1,719/mt. A rally in the US dollar weighed on base metals on Monday. LME aluminium is expected to trade between $1,700-1,740/mt today. The most traded SHFE 1912 contract recovered from earlier losses to close 0.15% stronger at 13,755 yuan/mt overnight. SHFE aluminium bucked the downtrend across base metals overnight, as it already stayed at lows after recent declines. It is expected to trade between 13,690-13,800 yuan/mt today, with spot premiums of 10-40 yuan/mt.
Zinc: Three-month LME zinc hit a new 10-week high of $2,439/mt on Monday, before it gave back all those gains to close the trading day 0.25% lower at $2,417/mt. An extended MACD red bar suggested lingering support in LME zinc, as it remained above moving averages. Falling LME zinc inventories and a firm backwardation, pointing to tightness in supply overseas, will also offer support to LME zinc prices. LME zinc is expected to stabilise at $2,390-2,440/mt today. The premium for LME cash zinc to the three-month contract stood at $37/mt on Monday. The most active SHFE 1912 contract recovered somewhat from earlier losses overnight, before it traded rangebound to close 0.5% weaker at 18,965 yuan/mt. The latest progress in US-China trade talks and moving averages provided support to SHFE zinc. SMM data showed that social inventories of refined zinc across Shanghai, Tianjin and Guangdong inched up over the weekend, which suggested an end to the post-holiday restocking by downstream consumers. This, combined with disappointing China trade data for September, will limit upward momentum in SHFE zinc. The SHFE 1912 contract is expected to move rangebound between 18,600-19,100 yuan/mt today, with spot premiums for 0# Shuangyan at 110-130 yuan/mt over the 1911 contract.
Nickel: Three-month LME nickel plummeted to a six-week low of $16,500/mt, near the 60-day moving average on Monday, before it recovered some ground to close 1.31% lower at $17,295/mt, near the 40-day moving average. Whether LME nickel could hold onto the 40-day moving average and $17,200/mt will be closely watched today. The most traded SHFE 1912 contract fell past the 40-day moving average to the lowest since September at 131,740 yuan/mt overnight, before it clawed back some losses to close 1.59% lower at 134,480 yuan/mt. Overnight loss sent SHFE nickel further away from the five- and 10-day moving averages. Support from the 40-day one and 130,000 yuan/mt will come under scrutiny today.
Lead: Three-month LME lead pulled back on Monday, losing 1.79% to $2,138/mt after hitting the highest since August 2018 at $2,195/mt on Friday. This pointed to strong resistance at $2,200/mt. LME lead appears to run out of stream to continue its uptrend, and faces the risks of a sustained pullback in the near term. The most active SHFE 1911 contract followed its LME counterpart lower to a more than two-week low of 16,725 yuan/mt overnight, before it clawed back some losses to end down 0.88% at 16,815 yuan/mt. SHFE lead fell below the 60-day moving average, as shorts entered the market. SHFE is expected to remain weak and rangebound in the short run.
Tin: Three-month LME tin rebounded from an earlier low of $16,475/mt to close 0.54% lower at $16,550/mt on Monday. Support is seen at the five- and 20-day moving averages as low as $16,500/mt, while resistance is at the 60-day one as high as $16,800/mt. The most traded SHFE 2001 contract recovered from a session-low of 136,180 yuan/mt to end 0.16% weaker at 136,940 yuan/mt overnight. Resistance is seen at the 20-day moving average as high as 137,500 yuan/mt, while support is at the 10-day one as low as 136,200 yuan/mt.