SMM Morning Comments (Jan 23)

Published: Jan 23, 2020 10:11 (GMT+8)

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SHFE base metals, except for aluminium, traded lower overnight

SHANGHAI, Jan 23 (SMM) –

Copper: Copper prices continued to weaken overnight, as renewed global economic growth concerns and China virus fears dented market sentiment. Three-month LME copper slipped to a near-three-week low of $6,095.5/mt, before closing the trading day 0.66% lower at $6,105/mt. The most active SHFE 2003 contract shed 0.64% in overnight trading session to end at 48,170 yuan/mt. LME copper is expected to move between $6,080-6,130/mt today, with SHFE copper at 48,000-49,300 yuan/mt. Spot discounts are seen stable at 50-10 yuan/mt. Trades in the futures and physical markets are set to be thin on the last trading day before the Chinese New Year holiday.

Aluminium: Three-month LME aluminium climbed to its highest in more than two weeks at $1,834/mt on Wednesday, before it eased to end down 0.96% at $1,809.5/mt. The most traded SHFE 2003 contract rebounded 0.35% overnight.

Zinc: Three-month LME zinc eased off its highest in more than two months on Wednesday, shedding 2.26% to close at $2,397/mt. Support lies at the 10-day moving average, while resistance is seen at the five-day one. This came despite zinc inventories across LME warehouses continuing to fall, declining 200 mt on the day to 50,700 mt. LME zinc is expected to trade between $2,370-2,420/mt today. The most active SHFE 2003 contract weakened in overnight trading to end at 18,175 yuan/mt, as growing concerns over post-holiday downstream production recovery on the back of the outbreak of a new coronavirus prompted longs to flee the market. The SHFE 2003 contract is expected to trade at 18,100-18,400 yuan/mt today. Spot premiums for domestic 0# Shuangyan are seen at 100-120 yuan/mt over the SHFE 2002 contract.

Nickel: Three-month LME nickel boomeranged on Wednesday, ending down 0.07% at $13,660/mt. Support lies at the lower Bollinger band, while a resistance confluence of several moving average is strong. The most traded SHFE 2003 contract slipped 1.06% to close at 106,750 yuan/mt in overnight trading, further away from the moving averages.

Lead: Three-month LME lead rallied on Wednesday, gaining 1.5% to end at $1,990/mt. LME lead now sees its trading level at $1,970/mt. The most active SHFE 2003 contract lost 0.46% to end at 15,095 yuan/mt overnight. It is expected to hold stable today.

Tin: Three-month LME tin fell on Wednesday for a second straight day, after a more than two-week ascent. LME tin has fallen below the five-day moving average, and sits around the 10-day one. Support is seen at $17,300-17,400/mt, the higher end of the range where it hovered in December. The most traded SHFE 2006 contract plunged to end at 138,710 yuan/mt overnight, as longs exited from the market. Support is seen at the 20-day moving average at 137,500 yuan/mt.

Morning comments Copper Aluminium Zinc Lead Nickel Tin

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