SMM Base Metals Market Daily Review (2015-4-9)

SHANGHAI, Apr. 10 (SMM) –

Copper
The most active SHFE copper contract met resistance at RMB 43,350/mt after opening Thursday’s daytime trading and slipped to RMB 43,000/mt. The prices then gained support and hovered near RMB 43,200/mt before ending down RMB 270/mt at RMB 43,310/mt. Positions in the most active contract increased 7,112 and trading volumes declined 33,466 lots. The rallying Chinese shares caused a fall in trading volumes for copper futures.

Spot premiums in Shanghai copper market continued to expand Thursday to RMB 50-90/mt over SHFE 1504 copper contract. Prices are RMB 43,390-43,460/mt for standard-quality copper and RMB 43,410-43,490/mt for high-quality copper.

Speculators bought on dips with SHFE copper staying weak. Some cargo holders sold goods under warehouse warrants after spot premiums widened. Downstream buyers increased purchases after SHFE copper prices declined, enlivening spot trades.

Aluminum
SHFE 1506 aluminum contract dived to RMB 13,135/mt due to tumbling crude oil and power tariff cuts after starting Wednesday’s night session at RMB 13,315/mt, and closed at RMB 13,215/mt. Trading volumes totaled 26,820 lots, with positions up 1,690 to 125,446.

On Thursday, the most active contract dived to RMB 13,050/mt as bears flooded in, but rallied to RMB 13,320/mt later before ending at RMB 13,240/mt. Trading volumes totaled 97,334 lots, with positions down 3,340 to 120,416.

Spot aluminum largely traded between RMB 13,030-13,060/mt in Shanghai on Thursday, discounts of RMB 80-110/mt over SHFE 1504 aluminum contract, versus RMB 13,020-13,040/mt in Wuxi, and RMB 13,040-13,070/mt in Hangzhou. SHFE 1504 aluminum contract lost over 1.5%, sending spot prices down as well. Lower prices lured some traders and processors in. In the afternoon, trading was muted

Lead
SHFE 1506 lead contract prices opened at RMB 12,715/mt Wednesday evening, then inched up and closed at RMB 12,790/mt, up RMB 80/mt. Trading volumes were 1,606 lots, and total positions grew 210 to 14,620.

The June delivery lead held steady at RMB 12,740-12,770/mt after opening Thursday’s daytime trading and closed up RMB 100/mt at RMB 12,810/mt as longs opened positions at the tail of trading. Trading volumes were 6,694 lots, and positions rose by 1,762.

Chihong Zn & Ge offered prices at about RMB 12,840-12,850/mt, and goods of Nanfang and Chengyuan were quoted at RMB 12,750-12,760/mt, flat with SHFE 1506 copper contract prices. Lead smelters refrained from selling, and traders were also reluctant to sell as they found it hard to replenish stocks. Prices thus moved higher. But downstream buyers continued to purchase as needed. Prices in Henan were RMB 30-50/mt higher than SMM lead prices.

Zinc
SHFE 1506 zinc contract prices opened at RMB 16,230/mt Tuesday evening, then inched up to RMB 16,300/mt, but fell slightly later and closed the day at RMB 16,240/mt, up RMB 45/mt or 0.28%. Total positions increased 2,196 to 138,422. SHFE 1506 zinc contract prices opened at RMB 16,240/mt on Wednesday, and extended gains, but rolled back early increases as a large number of longs left the market, and closed at RMB 16,190/mt, down RMB 5/mt or 0.03%. Trading volumes decreased 8,688 to 60,812 lots, and total positions fell 7,992 to 128,234. SHFE 1506 zinc contract prices are expected to meet resistance at RMB 16,300-16,500/mt in the near term.

#0 zinc prices were between RMB 16,040-16,070/mt, RMB 90-70/mt below SHFE 1506 zinc contract prices. #1 zinc was traded between RMB 15,940-15,970/mt. SHFE 1506 zinc contract prices fell to RMB 16,120-16,140/mt after opening, down RMB 40/mt, causing spot discounts to narrow to RMB 90-70/mt. Most smelters took a wait-and-see attitude. Inflows of imported zinc decreased slightly on falling SMM/LME zinc price ratio, allowing some cargo holders to hold prices firm. Some traders purchased at lower prices, and downstream buyers purchased modestly, keeping overall transactions muted. Shuangyan and Yuguang #0 zinc prices were RMB 16,050-16,070/mt, RMB 80-70/mt below SHFE 1506 zinc contract prices. Qinxin and Qilin #0 zinc prices were RMB 16,040-16,060/mt, with spot discounts of RMB 90-80/mt against SHFE 1506 zinc contract prices. SMC #0 zinc prices were RMB 15,990-16,000/mt, with spot discounts of RMB 140-130/mt against SHFE 1506 zinc contract prices. YP and KZ #0 zinc prices were RMB 15,980-15,990/mt, with spot discounts of RMB 150-140/mt against SHFE 1506 zinc contract prices. Indian #0 zinc prices were RMB 15,960-15,970/mt, with spot discounts of RMB 170/mt against SHFE 1506 zinc contract prices.

Tin
In Shanghai spot tin market, supply of cheap goods from Jiangxi increased, and one smelter kept lowering offers, triggering strong pessimism. This sent mainstream traded prices down RMB 1,000/mt to RMB 115,000-117,000/mt on Thursday

Nickel
SMM #1 nickel prices were between RMB 94,200-96,600/mt. Nickel prices stabilized in the morning, but a large influx of imported zinc was expected to weigh on nickel prices. Discounts on Russian nickel against Jinchuan nickel widened to RMB 1,800/mt. Some traders sold at a level RMB 100-200/mt above 1505 nickel contracts on the Wuxi electronic trading, much lower than market prices. But downstream buying interest was low, with trading muted and traded prices between RMB 94,300-96,400/mt. Jinchuan nickel prices were firm in the afternoon, while Russian nickel prices extended losses. A large numbers of traders sold off goods, with Russian nickel prices close to prices on the Wuxi electronic trading, and even below Jinchuan nickel prices. A growing inflow of Russian nickel kept investors cautious, and muted transactions, with traded prices between RMB 93,800-96,500/mt. Jinchuan Group lowered prices by RMB 500/mt to RMB 96,500/mt.