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SMM Morning Comments (Jan 9)


Cooper: While LME copper sees temporary support at $7,100/mt, the SHFE copper is expected to trade downwards to 54,000 yuan/mt. However, the implementation of copper scrap policy and the expected supply tightness of concentrate would limit the down side. LME copper is expected to trade at $7,090-7,150/mt today and the SHFE 1803 contract is to trade at 54,300-54,900 yuan/mt. In the spot market, the premiums are set to trade at 20-70 yuan/mt today with sellers holding up their prices.

Zinc: The rising spot premiums over LME zinc have stimulated delivery while price remained firm. Inventory level would be key to zinc price movement in the short term. LME zinc is expected to trade at $3,350-3,400/mt while SHFE zinc is expected to trade at 25,850-26,350 yuan/mt with bulls’ growing confidence.

Aluminium: A rising US dollar would accelerate the drop of LME aluminium, which is expected to trade at $2,150-2,185/mt today. SHFE aluminium is struggling at the 15,000 yuan/mt level and is expected to trade at 14,920-15,100 yuan/mt. Spot discounts are seen at 190-150 yuan/mt today.

Lead: SHFE lead traded above the five-day moving average with support from its LME counterpart.

Nickel: Downstream demand for nickel remained lukewarm but maintenances at large nickel pig iron (NPI) plants and the fire accident at Jinchuan Group give support to the price. LME nickel is expected to keep rangebound at high level while the main contract SHFE nickel is expected to trade at 97,900-99,700 yuan/mt today. In the spot market, the price is to move at 97,400-99,200 yuan/mt.

Tin: LME tin sees upper pressure at $20,000/mt and is expected to see rangebound trading in the short term. SHFE tin wandered around the 10-day moving average last night and is expected to trade at 144,000-145,500 yuan/mt. Spot prices, however, are rather firm at 142,000-144,500 yuan/mt with smelters holding up.

 Source: SMM