SMM Morning Comments (Nov 15)

SHANGHAI, Nov 15 (SMM) – 

Copper: Prices of copper slipped overnight as investors eschewed risk amid waned optimism around US-China trade deal and disappointing factory output data from China. Demand outlook was also dented on potential new US tariffs on European cars. Three-month LME copper fell for the fifth straight session by 0.49%, to close at $5,801/mt, with the most-traded SHFE 2001 contract losing 0.57% and finishing at 46,710 yuan/mt. Without support from any moving average, the contract may trade between 46,500-46,900 yuan/mt today with LME copper at $5,780-5,840/mt. Spot premiums are likely to firm at 130-170 yuan/mt. 

Aluminium: Three-month LME aluminium fell to the lowest this month at $1,742.5/mt, on reports that LME aluminium inventories increased over 75,000 mt to the highest since August 2, at 1.02 million mt. The most-active SHFE contract stabilised and finished at 13,685 yuan/mt with support from 13,675 yuan/mt. Trading range is seen at 13,675-13,750 yuan/mt and at $1,747-1,770/mt for LME aluminium. 

Zinc: Three-month LME zinc ended lower for the third day in a row, by 1.81% and closed at $2,388/mt. The backwardation structure eased, indicating greater downward pressure on prices. But record low LME zinc inventories, alongside the Bollinger lower band, will lend some support and keep LME zinc between $2,380-2,430/mt today. The most-liquid SHFE 2001 contract followed its LME counterpart lower, ending down 0.35% at 18,330 yuan/mt. Weaker-than-expected domestic manufacturing and fixed asset investment data depressed market sentiment and may see the contract at 18,200-18,500 yuan/mt today. 

Nickel: Prices of nickel extended their declines on eased concerns about ore shortage after top producer Indonesia allowed exporters to resume ore shipments until the end of the year. The most-active SHFE contract lost support from 120,000 yuan/mt, hitting a low of 118,360 yuan/mt and closing down 2.26% at 118,650 yuan/mt. Three-month LME nickel fell below the Bollinger lower band and finished at $15,120/mt, down 1.82% on the day. It may test the $15,000/mt mark today. 

Lead: Three-month LME lead headed for a fifth straight day of decline as it slipped to a low of $2,016/mt and ended at $2,023/mt. A lack of strong support is expected at the $2,000/mt mark. The most-liquid SHFE January 2020 contract came off from a high of 15,765 yuan/mt on a weaker LME lead, ending down 0.44% at 15,680 yuan/mt. The decline may be contained as the price gap between primary and secondary lead narrowed. 

Tin: Both London and Shanghai tin pared losses from the previous sessions while other base metals fell. Three-month LME tin hit an intraday high of $16,330/mt and closed at that level, up $310/mt on the day. The most-liquid SHFE 2001 contract stayed above all moving averages, ending up 430 yuan/mt at 135,130 yuan/mt, after loaded-up shorts weighed it to a low of 134,260 yuan/mt. Pressure above from $16,400/mt and 135,500 yuan/mt, respectively, will be monitored today.