SMM Morning Comments (May 14)

SHANGHAI, May 14 (SMM) –

Copper: Copper prices saw steady gains last Friday night on a weakened US dollar. LME copper stood above all moving averages with strong support, and it is expected to trade at $6,900-6,960/mt today. The SHFE 1807 copper contract stood above the 20-day moving average with pressure from the 60-day moving average. We see it trading at 51,400-51,800 yuan/mt during the day. Spot offers are expected to dip today with the approaching delivery, to a discount of 20 yuan/mt to a premium of 50 yuan/mt.

Aluminium: LME aluminium touched a low of $2,263.5/mt at one point during the European trading session last Friday. The SHFE 1807 contract surged to a high of 14,715 yuan/mt from a low of 14,630 yuan/mt last Friday night, but it met strong resistance at the five-day moving average. We expect the contract to trade rangebound at 14,550-14,730 yuan/mt with LME aluminium at $2,260-2,300/mt. Spot prices are seen at a discount of 20 yuan/mt to a premium of 20 yuan/mt.

Zinc: LME zinc attempted to test $3,100/mt last Friday night with support at the five- and 10- day moving averages. It showed stronger momentum than SHFE zinc and we expect it to trade at $3,070-3,115/mt today with limited downward room. The SHFE 1807 contract also gained but met pressure at the 20-day moving average last Friday. It is likely to continue to trade rangebound at 23,500-23,950 yuan/mt today. 

Nickel: As the US dollar fell and China’s financial data in April came out generally positive, most base metals gained last Friday. LME nickel rose across several moving averages last Friday with pressure at the 20-day moving average. It is expected to trade rangebound at high levels today. SHFE nickel 1807 contract is seen trading at 104,100-105,400 yuan/mt with spot prices at 103,600-104,900 yuan/mt today. 

Tin: LME tin regained the lost ground last Friday to close $200/mt higher at $21,000/mt. However, it mostly traded below all moving averages. We expect it to face pressure in the short term with support at $20,600/mt and resistance at $21,300/mt. The SHFE 1809 contract also traded below all moving averages and closed higher last Friday. It is expected to trade rangebound today with resistance at 146,500 yuan/mt and support at 144,500 yuan/mt. 

Lead: LME lead hit a high of $2,358/mt over the weekend and stood firmly above the five-, 10- and 20-day moving averages. We expect it to rise in the short term with SHFE/LME price ratio narrowing. Following the strong performance of its LME counterpart, SHFE 1806 contract rose and reached a high of 19,415 yuan/mt. We expect it to come off from highs today.

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