SMM Morning Comments (Dec 21)

SHANGHAI, Dec 21 (SMM) –

Copper: Copper prices weakened overnight following the rout on Wall Street. LME copper finished Thursday some 0.8% lower at $6,017.5/mt. The SHFE 1902 contract came off from a high of 48,600 yuan/mt to end at 48,230 yuan/mt overnight. Worries over economic growth and an overnight plunge in oil prices are expected to keep copper prices weak today. LME copper is likely to trade at $5,880-6,060/mt with the SHFE 1902 contract at 48,100-48,600 yuan/mt. Spot premiums are seen at 50-170 yuan/mt.

Aluminium: After a higher open, the SHFE 1902 contract hovered between the five- and 20-day moving averages overnight and ended at 13,680 yuan/mt. The contract is expected to trade at 13,600-13,700 yuan/mt today with spot discounts at 90-50 yuan/mt. LME aluminium traded higher on Thursday and ended at $1,915.5/mt as the US dollar index fell below 97. With weakness in the dollar, LME aluminium is likely to rebound slightly and trade at $1,915-1,930/mt today.

Zinc: LME zinc fluctuated to close lower at $2,573.5/mt on Thursday. With cautious investors and a lack of direction in short-term moving averages, LME zinc is expected to hold stable and trade at $2,520-2,570/mt today. The SHFE 1902 contract jumped during earlier trades overnight and ended at 21,115 yuan/mt. SHFE zinc traded steadily with support at the 10- and 60-day moving averages. Despite tightening supplies in the spot market, SHFE zinc is unlikely to rally strongly in a low season of consumption. It is expected to trade at 20,850-21,250 yuan/mt today.

Nickel: LME nickel fluctuated to close lower at $10,955/mt on Thursday. The SHFE 1905 contract pared some earlier gains overnight and closed 0.3% higher at 90,110 yuan/mt. Nickel prices are expected to remain rangebound in the near term. LME nickel is likely to hover around $10,900/mt and the SHFE 1905 contract is expected to trade at 89,000-90,500 yuan/mt. Spot prices are seen at 89,500-95,500 yuan/mt.

Lead: LME lead moved out of a range at lows to a high of $1,982/mt on Thursday and closed at $1,974.5/mt, with pressure at the 60-day moving average. Strong pressure remains at $2,000/mt. After opening higher, the SHFE 1902 contract climbed overnight and ended at 18,120 yuan/mt. Standing above moving averages, the contract is expected to continue to trade rangebound.

Tin: Moving above the five-day moving average, LME tin inched up on Thursday and closed at $19,320/mt. It is expected to strengthen with weakness in the US dollar, with resistance at $19,500/mt. The SHFE 1905 contract continued its rangebound pattern overnight and ended at 146,340 yuan/mt. Without a clear direction, the contract is likely to remain rangebound into short term with resistance at 147,500 yuan/mt and support at 145,000 yuan/mt.