SMM Morning Comments (Jan 31)
Copper: Lacklustre downstream consumption has dragged the performance of copper futures of late but we see support for SHFE copper at 53,000 yuan/mt. LME copper, meanwhile, is set to trade at $7,050-7,110/mt. We see spot discounts stable today at 210-150 yuan/mt amid quiet physical market.
Aluminium: LME aluminium will test support at the $2,200/mt level today while the SHFE contract may do the same at the 14,500 yuan/mt level. Spot discounts are seen at 140-100 yuan/mt today.
Zinc: LME zinc fell apart as fund liquidity tightened and fundamentals were not enough to boost the prices. We expect the contract to trade at $3,490-3,540/mt today with its SHFE counterpart at 26,300-26,750 yuan/mt.
Nickel: While nickel futures may stay rangebound in the near term, we see a better fundamental picture ahead. The SHFE 1805 contract is expected to trade at 101,000-103,000 yuan/mt today with spot price at 100,300-102,200 yuan/mt.
Tin: A technical correction is in sight for LME tin following several days of increase. We see pressure at $22,000/mt and support at $21,500/mt. SHFE tin, on the other hand, is set to trade at 148,000-150,000 yuan/mt today with spot prices at 147,500-149,000 yuan/mt amid thin trading.
Lead: Physical supply remained sufficient but buying interest was sluggish ahead of Chinese New Year. We see spot prices go 100 yuan/mt lower to 19,450-19,600 yuan/mt today.