SMM Base Metals Market Daily Review (2015-7-10)

SHANGHAI, Jul. 13 (SMM) – 

Copper 

During Friday trading session, SHFE 1509 copper contract touched a high of RMB 41,220/mt and later rolled back some gains, to end at RMB 40,360/mt, up RMB 300/mt or 0.75%. Trading volumes of SHFE 1509 copper fell 244,000 lots while positions were up 3,192. Trading volumes of SHFE 1510 copper dropped 39,888 lots whereas positions rose 23,178.

SHFE reported copper inventories in its approved warehouses increased 3759 mt last week.

Spot copper was offered RMB 120-180/mt higher than SHFE 1507 copper in Shanghai Friday. Traded prices were RMB 41,520-41,780/mt for standard-quality copper and RMB 41,550-41,800/mt for high-quality copper. The spot premiums were about RMB 130-150/mt in the afternoon. 

Copper futures headed for more gains. Speculators rushed to sell and lowered their price offers, narrowing spot premiums quickly. Traders bought many standard-quality coppers for term contracts, driving stand-quality copper prices up. But few deals were made for high-quality copper. Logistics warehouses were impacted by typhoon in this past week. Downstream buyers still watched from the sidelines. Thus, deals were mainly made between traders today.

Aluminum      

Last Friday, SHFE 1509 aluminum contract dipped to RMB 12,390/mt, but rebounded to RMB 12,535/mt in the afternoon. Finally, the contract ended at RMB 12,410/mt. Trading volumes totaled 42,236 lots, and positions were up 1,750 lots to 124,748 lots. The positive impact from rising stock market has faded. Poor market fundamentals will keep the contract in check.  

SHFE 1507 aluminum contract continued rising last Friday, lifting spot prices in east China further. Prices were RMB 12,310-12,320/mt in Shanghai, discounts of RMB 10-30/mt over July aluminum on the SHFE, RMB 12,320-12,330/mt in Wuxi and RMB 12,320-12,330/mt in Hangzhou. Processors entered the market out of bullishness, leaving trading brisk. In the afternoon, a few deals were reported. 

Lead

SHFE 1509 lead started Thursday evening session at RMB 12,905/mt and closed up RMB 265/mt at RMB 12,960/mt with the high-end price at RMB 13,130/mt.

The contract increased to RMB 13,160/mt following China’s stock rally on Friday. Iron ore and rebar futures prices fell after a high, SHFE 1509 lead fell below RMB 13,000/mt before ending up RMB 215/mt at RMB 12,910/mt. Trading volumes totaled 5,498 lots and positions slipped 120 to 12,382.

In Shanghai market, mainstream prices for Nanfang and Chengyuan brands were RMB 13,300-13,350/mt, RMB 340/mt higher than SHFE 1509 lead. Humon and Hanjiang brans quoted RMB 13,240-13,270/mt, versus RMB 13,150-13,200/mt for Nanfang and Shuangyan brands.

Shandong Humon Smelting and Western Mining moved goods out, but spot supply was still tight in market. Lead prices surged following China’s stock prices. Smelters and traders were unwilling to sell but downstream buyers watched from the sidelines, leaving trades softening.

Zinc

SHFE 1509 zinc contract prices opened at RMB 15,280/mt Thursday evening, then hovered around RMB 15,300/mt, and closed at RMB 15,305/mt, up RMB 270/mt. SHFE 1509 zinc contract prices surged to RMB 15,475/mt on Friday then fell back, and closed at RMB 15,290/mt, up RMB 260/mt or 1.73%. Trading volumes decreased 68,708 lots to 180,552 lots, and total positions increased 7,270 to 128,290. SHFE 1509 zinc contract prices are expected to point toward RMB 15,300/mt this evening.

#0 zinc prices were between RMB 15,370-15,430/mt, RMB 10-70/mt above SHFE 1509 zinc contract prices. #1 zinc prices were RMB 15,350-15,370/mt. SHFE 1509 zinc contract prices rose to RMB 15,350-15,380/mt, causing spot premiums to fall to RMB 20-70/mt against the first. SHFE 1509 zinc contract prices touched RMB 15,450/mt at one point, with spot premiums narrowing to zero, but trading was muted. Smelters were still unwilling to sell despite rising zinc prices, and supply from some traders was also modest, leading to firm spot premiums. Downstream, purchasing was modest, and trading by traders under term contracts increased, allowing overall transactions to improve. SHFE 1509 zinc contract prices continued to fall in the afternoon, with spot premiums between RMB 20-40/mt, and transactions limited.  

Tin

Last Friday, SHFE 1509 tin contract opened at RMB 109,420/mt, and hovered around RMB 108,970/mt for most of the day. The contract fell slightly at the tail of the day as longs exited, and ended up RMB 40/mt or 0.04% at RMB 107,840/mt. Trading volumes were up 418 lots to 3,844 lots, and positions were up 240 to 2,666. The contract should meet resistance at RMB 111,000/mt tonight.    

In Shanghai spot tin market, spot prices rose to RMB 111,000-113,000/mt on July 10. Supply was tight. Trading cooled a little. Goods from Yunnan Tin Group were offered at RMB 113,000/mt.  

Nickel   

SMM #1 nickel prices were between RMB 85,300-86,800/mt. Premiums of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading fell to RMB 1,000/mt in the morning. Purchasing was modest as nickel prices surged in the morning, with prices between RMB 85,300-86,500/mt. nickel prices inched lower in the afternoon, turning traders and downstream buyers cautious. Especially downstream buyers had replenished stocks, with prices between RMB 84,900-86,200/mt. Jinchuan Group hiked prices by RMB 3,000/mt to RMB 86,500/mt.