Exclusive: SMM Morning Comments (Dec 27)
Copper: The physical market towards the year-end saw sluggish demand and more than sufficient supply. The spot discount is unlikely to see any turnaround in the near term and we expect it to trade at 350-280 yuan/mt today. On the futures side, we expect LME copper to trade up at $7,150-7,200/mt today and the SHFE 1802 copper at 55,000-55,500 yuan/mt today. The market anticipates an increasingly recovering global economy, tighter supply from the mines, and a limited copper scrap supply to China.
Aluminium: We expect LME aluminium to see some corrections today and trade at $2,155-2,195/mt while the SHFE contract rangebound at 14,500-14,800 yuan/mt. Spot discounts are seen at 340-300 yuan/mt today.
Zinc: The LME contract is likely to slip today, following the SHFE movement over the past two days. We expect the trading ranges to be $3,230-3,275/mt and 25,250-25,700 yuan/mt. Separately, investors would also watch out for the data on Chinese industrial enterprises’ profits in November.
Nickel: SHFE nickel has traded above several moving averages and is expected to stay in a narrow range today at 94,800-96,300 yuan/mt. The spot price is to move at 94,500-96,000 yuan/mt.
Tin: A weaker US dollar is set to give some support to LME tin but the contract may meet resistance at $19,700/mt. The SHFE contract looks set to stay at the 40-day moving average level, trading at 142,000-144,000 yuan/mt today. The physical demand, on the other hand, was weaker than expected. We expect spot market to trade at 139,000-140,500 yuan/mt.
Lead: SHFE lead is trading under the pressure of its 5-day moving average and it looks set to test support at the 40-day moving average.