SMM Morning Comments (Oct 29)

Published: Oct 29, 2019 09:42

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LME base metals mostly increased with the SHFE complex trading mixed

SHANGHAI, Oct 29 (SMM) –

Copper: Bullish sentiment around US-China trade and a three-month Brexit extension eased risk aversion in the market and supported copper prices at highs last night. Three-month LME copper climbed to a high of $5,927/mt and closed 0.16% higher at $5,917/mt, with the most-active SHFE December contract rising 0.13% to finish at 47,490 yuan/mt. Prices are expected to find support from the optimistic macroeconomic development in the near term. Currently above all moving averages with bullish signals from technical indicators, the SHFE contract will stay at highs and trade between 47,200-47,600 yuan/mt today. LME copper is likely to hover at $5,890-5,950/mt.

Aluminium: Three-month LME aluminium gained for the second straight session with a high of $1740/mt, ending up 0.14% at $1,736/mt as longs added their position. The most-liquid SHFE December contract failed to recover after loaded-up shorts sent it to a low of 13,765 yuan/mt, closing 0.25% lower on the day at 13,790 yuan/mt. Trading range today is seen at 13,750-13,850 yuan/mt and $1,720-1,750/mt, respectively.

Zinc: Three-month LME zinc continued to climb overnight, as inventories at a 12-year low and hopes around a US-China trade deal set the metal on course for a fourth straight daily gain. It finished 0.86% higher on the day at $2,536/mt. The most-active SHFE December contract tracked its LME counterpart higher, ending up for the second session by 0.24%, at 19,155 yuan/mt. Declines in social inventories of refined zinc indicated healthy demand, which also supported the prices. Zinc prices are poised for further gains today with the SHFE contract hovering between 18,800-19,300 yuan/mt and LME zinc between $2,510-2,560/mt.

Nickel: Three-month LME nickel shrugged off resistance from $17,000/mt to a high of $17,015/mt on news that Indonesia's nickel miners agreed to stop nickel ore exports immediately, earlier than the previously scheduled January 2020. Uncertainty around the authenticity of the news saw prices dipping from highs, ending down 1.75% at $16,555/mt. It may continue to test support from the 10-day moving average today. The most-liquid SHFE December contract also closed 0.21% lower on the day at 132,590 yuan/mt. Pressure from the 20-day moving average and support from the five-day moving average will be monitored today.

Lead: Three-month LME lead extended its robust trend and showed little signs of coming off from highs, as it recovered $2,198/mt and ended up 0.52% at $2,228.5/mt. The most-liquid SHFE December contract stayed rangebound, closing slightly higher at 16730 yuan/mt. Support from 16,600 yuan/mt will be watched today.

Tin: Three-month LME tin closed $45/mt higher overnight at $16720/mt as it pared some gains after rising to a high of $16,925/mt. The most-traded SHFE January 2020 contract slipped to a low of 138,690 yuan/mt before closed down 190 yuan/mt at 138,830 yuan/mt. Support below is expected at 137,500 yuan/mt with that for LME tin at $16,600/mt.

Morning comments Futures movement

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