SMM Morning Comments (Nov 12)

SHANGHAI, Nov 12 (SMM) – 

Copper: Prices of copper came off from highs as China’s lower-than-expected social financing data dented demand outlook from the top consumer. The Britain economy avoided recession with a third-quarter growth rebound, but the year-over-year growth rate was at the slowest pace in almost a decade, providing limited support to copper prices. Oil prices stayed at lowes amid doubts over OPEC cuts, and this also kept the red metal under pressure. Three-month LME copper failed to stand above $5,900/mt and closed down 0.73% at $5,880/mt. The most-traded SHFE January 2020 contract went down 0.25% and finished at 47,140 yuan/mt. Bearish signals from technical indicators may see the SHFE contract between 46,900-47,200 yuan/mt, with LME copper at $5,860-5,900/mt today. Spot premiums are likely at 80-110 yuan/mt. 

Zinc: LME zinc inventories shrank for 31 consecutive sessions, by 1.43% on Monday, and this lifted three-month LME zinc up 0.2% to finish at $2,499/mt. The most-liquid SHFE contract tracked its LME counterpart higher, ending up 0.59% at 18,685 yuan/mt, regaining losses from the previous week. Weaker demand in an upcoming slow season, however, may see the contract testing support from 18,500 yuan/mt in the short term. Today, the contract may hover between 18,850-18,550 yuan/mt with LME zinc between $2,480-2,520/mt. 

Nickel: Three-month LME nickel diverged from all moving averages above, plunging 3.77% to close at $15,570/mt. Support from the Bollinger lower band will be monitored today. The most-traded SHFE nickel contract fell for the third straight session and slipped to the lowest since September, ending at 122,150 yuan/mt, down 2.17% on the day. It is expected to test support from 120,000 yuan/mt in the near term. 

Lead: Three-month LME lead retreated after climbed as base metals mostly fell during the European trading hours, ending down 0.9% at $2,093/mt. The most-liquid SHFE December contract showed little signs of stopping the decline, closing lower for the ninth session in a row by 1%, at 15,855 yuan/mt. Change in the price gap between primary and secondary lead may determine a turning point for SHFE lead prices. 

Tin: Both three-month LME tin and the most-liquid SHFE January 2020 contract consolidated with pressure and ended lower overnight. Today, support from $16,300/mt and 136,100 yuan/mt, respectively, will be monitored.