SMM Base Metals Market Daily Review (2015-6-3) - Shanghai Metals Market (SMM)

SHANGHAI, Jun. 4 (SMM) –

Copper

SHFE 1508 copper contract prices started Tuesday’s night session at RMB 43,730/mt and climbed to RMB 43,870/mt before meeting resistance. The prices then retreated to RMB 43,680/mt and finished the session at RMB 43,740/mt, down RMB 130/mt.

The August-delivery SHFE copper moved in a narrow range Wednesday and touched a low of RMB 43,500/mt before ending at RMB 43,530/mt, down RMB 50/mt. Positions in the most active copper contract declined 8,112 and trading volumes increased 672 lots.

Spot copper was still offered at premiums of RMB 40-90/mt to SHFE 1506 copper contract in Shanghai Wednesday morning. Traded prices were RMB 43,950-44,000/mt for standard-quality copper and RMB 43,970-44,050/mt for high-quality copper. Most sellers offered premiums of RMB 30-80/mt in the afternoon, as some low-end goods flowed into the market.

Cargo holders shipped out goods normally, and spot premiums remained little changed. Some sellers intended to push for higher premiums at midday, but downstream producers refused to buy at highs.

Aluminum

On Wednesday, SHFE 1508 aluminum contract was capped below the 5-day moving average. The most active contract followed other base metals down to RMB 13,130/mt in the afternoon before ending at RMB 13,140/mt. Trading volumes totaled 26,250 lots, and positions were up 2,494 to 135,252. Strong bearishness and poor market fundamentals mean that prices will remain at current lows in the short term.

Spot aluminum largely traded between RMB 12,940-12,960/mt in Shanghai on Wednesday, discounts of RMB 90-100/mt over SHFE 1506 aluminum contract, versus RMB 12,920-12,940/mt in Wuxi, and RMB 12,970-12,980/mt in Hangzhou. Sellers and buyers were at loggerheads with each other over pricing, leaving trading thin. In the afternoon, market turned quiet.

Lead

SHFE 1508 lead opened Tuesday night at RMB 13,190/mt and ended down RMB 15/mt at RMB 13,175/mt due to rising shorts, after touching a high of RMB 13,255/mt.

The contract fluctuated narrowly between RMB 13,180-13,220/mt during Wednesday morning session. But in the afternoon, the most-trading contract finished down RMB 115/mt at RMB 13,075/mt owing to falling LME metals and growing shorts.

In spot market, Nangfang brand quoted a RMB 580/mt premium over SHFE 1508 lead at RMB 13,770-13,790/mt with RMB 13,730/mt for Shuangyan (packed in plastic), RMB 13,450/mt for Shuangyan (packed in iron) and RMB 13,350/mt for older Honglu brand goods.

Spot supply jumped with goods at Nanfang Non-ferrous and Baiyin Non-ferrous flowing into market and more cargo holders were willing to move goods. But downstream increased to buy secondary lead and waited to purchase lead at a lower price, leaving the market quiet.

Quotes were RMB 13,600-13,650/mt for branded goods in Henan, on par with SMM price average. Smelters in Jiangxi started maintenance cycle again recently, which failed to hike local spot supply. In response, spot premium there only dropped slightly against SMM lead price.

Zinc

SHFE 1508 zinc contract prices opened at RMB 16,505/mt Monday evening, then fluctuated between RMB 16,530-16,540/mt, and closed at RMB 16,520/mt, down RMB 155/mt or 0.93%. Trading volumes decreased 22,670 to 57,326 lots, and total positions grew 5,910 to over 142,744. SHFE 1508 zinc contract prices opened at RMB 16,535/mt on Wednesday, then inched down and dipped to an intraday low of RMB 16,260/mt as a large number of longs left the market, and extended losses in the afternoon with falling LME zinc prices, and closed at RMB 16,345/mt, down RMB 185/mt or 1.12%. Trading volumes increased 45,090 to 180,892 lots, and total positions fell 1,936 to 138,514. SHFE 1508 zinc contract prices are expected to fall further this evening.

#0 zinc prices were between RMB 16,380-16,410/mt, RMB 100-80/mt below SHFE 1508 zinc contract prices and RMB 70-50/mt below SHFE 1507 zinc contract prices. #1 zinc prices were RMB 16,350-16,370/mt. SHFE 1508 zinc contract prices fell RMB 50/mt, causing spot discounts to narrow RMB 20/mt. Some smelters held back goods, but traders and cargo holders both releases goods, leaving supply ample. Traders engaged in term contracts actively, but downstream buyers mostly took a wait-and-see attitude, with overall transactions quiet. SHFE 1508 zinc contract prices fell slightly in the afternoon, with spot discounts of #0 zinc narrowing RMB 10-20/mt.

Tin

In Shanghai spot tin market, mainstream traded prices fell to RMB 114,000-115,500/mt on Wednesday. Tin output in Jiangxi fell, due to environmental protection inspections and unit maintenance. But falling supply failed to support prices. Instead, weak demand dragged prices down. Yunxi brand tin traded at RMB 115,000-116,000/mt.

Nickel

SMM #1 nickel prices were between RMB 96,300-100,400/mt. Supply increased as traders sold proactively in the morning. Premiums of Jinchuan nickel against the most actively traded nickel contracts on the Wuxi electronic trading fell to RMB 3,200/mt, down sharply from late May. Downstream buying interest was low, with traded prices between RMB 96,100-99,600/mt and trading lackluster. Nickel futures prices dropped in the afternoon, and traders sold proactively, weighing on premiums of Jinchuan nickel. Some traders began to sell warrants to increase liquidity, while downstream buyers were unwilling to purchase, leaving overall transactions quiet. Jinchuan Group raised prices by RMB 1,000/mt to RMB 101,000/mt.