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SMM Morning Comments (Jan 30)

2018-01-30

Copper: The latest Commitments of Traders report published by the Commodity Futures Trading Commission (CFTC) showed that investors have reduced their long positions following a price drop earlier last week. We see pressure for copper futures prices as Chinese consumptions dwindle ahead of Chinese New Year. The LME contract is expected to trade at $7,070-7,120/mt today while the SHFE 1803 is expected at 53,000-53,600 yuan/mt. Spot discounts are set to go deeper at 220-150 yuan/mt.

Aluminium: The five-day, 10-day and 20-day moving averages have started to form pressure for the LME aluminium contract, which we expect to trade at $2,210-2,260/mt today. SHFE aluminium, on the other hand, is likely to follow the downward trend and trade at 14,500-14,700 yuan/mt. Spot discounts are seen at 170-130 yuan/mt.

Zinc: We see support for zinc prices both on the macroeconomic and fundamental fronts, and the rebound in US dollar had only a small impact. LME zinc is expected to trade at $3,525-3,575/mt today with the SHFE contract at 26,750-27,200 yuan/mt.

Nickel: The fundamentals of nickel remained little changed with weak downstream consumption. The SHFE 1805 contract is set to trade at 104,200-106,000 yuan/mt with spot prices at 103,500-105,300 yuan/mt.

Tin: LME tin may trade towards the $24,000 level if it broke through the resistance at $22,000/mt. We expect the SHFE contract to trade at 150,000-152,000 yuan/mt today and give support to the physical market, which is seen at 148,000-149,500 yuan/mt.

Lead: Supply tightness remains in the lead market but demand was sluggish due to the approaching Chinese New Year holiday. We see spot prices lower today at 19,500-19,650 yuan/mt today.

 Source: SMM