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SMM Morning Comments (Jan 2)

2018-01-02

Copper: LME copper is set to see a correction following 15 consecutive days of increase and bulls taking profits. While it is expected to trade at $7,180-7,320/mt today, the SHFE 1803 copper is expected to trade at 55,200-56,000 yuan/mt. Trading liquidity in the spot market is set to recover and we see discounts at 220-150 yuan/mt today.

Aluminium: LME aluminium set a new high before the New Year holiday with increased volatility.  We expect the contract to trade at $2,260-2,295/mt today and the SHFE aluminium at 15,250-15,500 yuan/mt. Spot discounts are to move at 370-330 yuan/mt.

Zinc: While lower zinc inventory at LME has supported the prices, funds entered the market despite holiday risk sent the contract up to $3,326/mt. Today it is expected to trade at $3,290-3,335/mt and drive SHFE zinc to 25,500-26,000 yuan/mt today. However, we see limited increase for the domestic  contract due to lacklustre fundamentals.

Nickel: LME nickel is expected to trade in a narrow range at high level today with the SHFE 1805 contract at 97,600-99,800 yuan/mt. Spot price is seen at 97,100-99,200 yuan/mt.

Tin: LME tin would test the support at $20,000/mt with upper pressure at $20,200/mt. SHFE tin, on the other hand, sees upper pressure at 146,000 yuan/mt and trading range at 144,000-146,000 yuan/mt.  Spot prices are supported by futures both at home and abroad and set to trade at 140,000-142,500 yuan/mt today.

Lead: SHFE lead are in stalemate with rather balanced market forces from both sides. It will keep rangebound in the near term.

Source: SMM