SMM Morning Comments (Jan 10)

SHANGHAI, Jan 10 (SMM)? 1/4 ?

Copper: There is still room for downward movement for copper prices and we see LME copper likely to trade towards the $7,000/mt level. We expect the LME contract to trade at $7,070-7,130/mt today and the SHFE contract at 54,400-54,900 yuan/mt. Spot premiums are to rise to 30-80 yuan/mt today.

Zinc: LME zinc began to slip after touching $3,400/mt and we expect it to trade at $3,315-3,365/mt today. SHFE zinc is dominated by funds outflow with bearish fundamentals. We see the price at 25,800-26,300 yuan/mt today, when investors are watching out for China’s consumer price index (CPI) and producer price index (PPI) in December.

Aluminium: LME aluminium continued to drop and the 20-day moving average may not provide enough support today. The price is expected to trade at $2,140-2,165/mt while the SHFE aluminium is expected to trade at 14,910-15,100 yuan/mt today. In the spot market, the discounts are to move at 160-120 yuan/mt.

Nickel: LME Nickel traded around the five-day moving average and is expected to rangebound at high level today. The main contract of SHFE nickel is expected to trade at 98,900-101,000 yuan/mt with spot price at 98,500-100,500 yuan/mt.

Lead: While SHFE lead went below the five-day moving average, several other moving averages still seen solid enough.

Tin: LME tin saw upper pressure at $20,000/mt and is expected to rangebound at high level in the short term. The SHFE contract is expected to trade at 144,000-145,500 yuan/mt today whereas the spot market at 142,500-144,000 yuan/mt sees limited supply. 

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