SMM Morning Comments (Dec 3)

SHANGHAI, Dec 3 (SMM) –

Copper: Three-month LME copper fell to a one-week low of $5,852/mt on Monday before it finished down 0.37% at $5,858/mt. The most active SHFE 2001 contract slipped to its lowest since November 26 at 47,040 yuan/mt overnight, before it recovered to close a tad weaker at 47,200 yuan/mt. A plunge in US dollar on downbeat US data contributed to the recovery in copper prices, but global growth concerns and trade developments boosted risk aversion sentiment. Copper prices are expected to stabilise at lows today. LME copper is expected to move between $5,840-5,890/mt, with SHFE copper at 47,000-47,400 yuan/mt. Spot premiums are seen at 100-130 yuan/mt, and overnight dip in prices of futures will likely boost spot trades today.  

Aluminium: As the greenback tumbled, three-month LME aluminium climbed to a three-week high of $1,793/mt on Monday, before it ended up 1.79% at $1,791.5/mt, standing above all near-term moving averages. LME aluminium is expected to trade between $1,760-1,800/mt today. The most traded SHFE 2001 contract rose to its highest since October 9 at 13,995 yuan/mt overnight, before closing up 0.68% at 13,990 yuan/mt. The build of long positions accounted for overnight gain in SHFE aluminium, as falling social inventories domestically improved market sentiment. The SHFE 2001 contract is expected to trade rangebound at 13,850-14,000 yuan/mt today, with spot premiums of 50-70 yuan/mt over the SHFE 1912 contract.

Zinc: Three-month LME zinc dropped 2.13% on Monday to close at a three-month low of $2,228/mt, as heightened tensions between the US and China over Hong Kong outweighed a 0.25% decline in LME zinc inventories and upbeat Chinese economic data. LME zinc is expected to move between $2,200-2,240/mt today, and support at the lower Bollinger band should be closely watched. The most active SHFE 2001 contract weakened 0.92% to 17,710 yuan/mt overnight, and is expected to move between 17,600-18,200 yuan/mt today. Spot premiums for domestic 0# Shuangyan are seen at 330-350 yuan/mt over the SHFE 1912 contract.

Nickel: Three-month LME nickel rebounded from earlier lows to an intraday high of $13,815/mt on Monday, before it gave back some gains to close 0.29% higher at $13,705/mt. LME nickel resides around $13,700/mt and is supported by $13,600/mt. The most traded SHFE 2002 contract hovered in a wide range around the daily moving average overnight and ended down 0.41% at 108,160 yuan/mt. Support at 108,000 yuan/mt will come under scrutiny today.  

Lead: Three-month LME lead slipped to its lowest since July 9 at $1,897/mt on Monday, before it closed down 2.11% at $1,903.5/mt. We see further downside room in LME lead. The most active SHFE 2001 contract plunged to a new low of 15,060 yuan/mt overnight, before it ended down 1.4% at 15,120 yuan/mt. SHFE lead saw its losses accelerate in recent days. Changes in prices of battery scrap are likely to provide some cues on the direction of the SHFE lead market.

Tin: Three-month LME tin boomeranged on Monday, coming off from a three-week high of $16,620/mt to an intraday low of $16,350/mt before recovering to end 0.33% higher at $16,550/mt. Resistance is seen at the 60-day moving average at $16,600/mt. The most traded SHFE 2001 contract slipped to a session-low of 137,900 yuan/mt overnight, before it recouped some losses to close 0.12% lower at 138,690 yuan/mt. Resistance lies at 139,500 yuan/mt, while support lies at 138,000 yuan/mt.