SMM Base Metals Market Daily Review (2015-3-11)

SHANGHAI, Mar. 12 (SMM) – 

 

SHFE most active copper contract hovered near RMB 42,200/mt during Wednesday’s daytime trading, with resistance at RMB 42,300/mt. The May-delivery copper ended at RMB 42,080/mt, down RMB 430/mt. Positions of the most active contract declined 3,740. Trading activities reduced with copper prices moving sideways.

 

SHFE most-active copper contract opened lower at RMB 42,600/mt for Tuesday’s night session and mainly moved around RMB 42,060/mt before ending down RMB 420/mt at RMB 42,090/mt. Positions in the May delivery copper fell by 2,544, and trading volumes were 168,324 lots.

 

Spot copper was offered at discounts of RMB 50-120/mt to SHFE 1503 copper contract in Shanghai early Wednesday. Standard-quality copper traded at RMB 42,120-42,220/mt and high-quality copper sold for RMB 42,150-42,250/mt.

 

With the price gap between SHFE 1503 and 1504 copper contracts narrowing, cargo holders were unwilling to lower price offers. Meanwhile, traders were reluctant to buy, but some downstream producers sourced goods in the market.  

 

Aluminum      

SHFE 1505 aluminum contract inched up after starting Tuesday’s night session at RMB 12,880/mt. The most active contract ended at RMB 12,890/mt. Trading volumes totaled 10,868 lots, with positions down 544 to 122,694. 

 

China’s industrial value-added, fixed asset investment and consumer goods retail sales data for the January-February period all undershot forecasts, pointing to great downward pressures facing the economy. Markets are hopping for further stimulus measures to boost flagging economy. May aluminum on the SHFE hovered above RMB 12,900/mt before ending at RMB 12,900/mt. Trading volumes totaled 25,678 lots, with positions up 4 to 123,242. 

 

Trading was light in east China aluminum market. Thin margins bit into traders’ buying interest, and downstream consumption was also limited, sending prices down. Spot aluminum largely traded between RMB 12,710-12,720/mt in Shanghai and Wuxi on Wednesday, discounts of RMB 160-170/mt over SHFE 1503 aluminum contract, versus RMB 12,730-12,740/mt in Hangzhou. In the afternoon, market turned quiet. 

 

Lead for May delivery on the Shanghai Futures Exchange, the most active contract, opened at RMB 12,230/mt and then slid to RMB 12,135/mt before finishing down RMB 75/mt at RMB 12,200/mt in Tuesday’s night session.

 

On Wednesday, SHFE lead initially hovered between RMB 12,200-12,250/mt and then ended down RMB 55/mt at RMB 12,220/mt. China’s large industrial added value increased 6.8% in the first two months, missing a 7.7% rise expected. The country’s retail sales of consumer goods rose 10.7% YoY in February, undershooting a 11.6% increase estimated.

 

Chihong Zn & Ge traded at RMB 12,400/mt in Shanghai on Wednesday, a RMB 170/mt premium to the most active SHFE 1505 lead contract. Traded prices were RMB 12,320-12,330/mt for Nanfang and Chengyuan, and RMB 12,260-12,270/mt for Humon. Overall trading was light as downstream producers went bargain-hunting only in light volumes. 

 

SHFE 1505 zinc contract prices opened at RMB 15,700/mt Tuesday evening, then plummeted to RMB 15,640/mt, but leveled out due to short covering and closed the day at RMB 15,730/mt, down RMB 50/mt or 0.32%. Trading volumes fell 3,378 to 40,044 lots, and total positions increased 142 to 177,966. SHFE 1505 zinc contract prices opened at RMB 15,720/mt on Wednesday, then inched down below RMB 15,700/mt, and closed out the day at RMB 15,695/mt, down RMB 85/mt or 0.54%. Trading volumes decreased 6,420 to 88,516 lots, and total positions decreased 3,392 to 174,432. SHFE 1505 zinc contract prices will remain weak this evening.

 

#0 zinc prices were between RMB 15,720-15,780/mt, RMB 0-60/mt above SHFE 1505 zinc contract prices. #1 zinc was traded between RMB 15,670-15,690/mt. SHFE 1505 zinc contract prices fluctuated between RMB 15,710-15,750/mt, down RMB 30-60/mt, but spot premiums did not widen. Smelters sold actively despite falling zinc prices, leading to sufficient supply. Cargo holders lowered spot premiums due to soft demand, which kept investors on the sidelines, with trading mainly made between traders. Huize #0 zinc prices were RMB 15,770-15,790/mt, RMB 60/mt above SHFE 1505 zinc contract prices. Shuangyan #0 zinc prices were RMB 15,760-15,780/mt, RMB 40-60/mt above SHFE 1505 zinc contract prices. Yuguang #0 zinc prices were RMB 15,750-15,770/mt, RMB 30-40/mt above SHFE 1505 zinc contract prices. Qilin #0 zinc prices were RMB 15,730-15,750/mt, with spot premiums of RMB 10/mt against SHFE 1505 zinc contract prices. Qinxin #0 zinc prices were RMB 15,720-15,730/mt, with spot premiums of RMB 0-10/mt against SHFE 1505 zinc contract prices. SMC #0 zinc prices were RMB 15,720-15,730/mt, with spot discounts of RMB 0-10/mt against SHFE 1505 zinc contract prices. Indian #0 zinc prices were RMB 15,680-15,700/mt, with discounts of RMB 50-40/mt against SHFE 1505 zinc contract prices. Spot discounts/premiums remained largely unchanged in the afternoon as spot zinc prices fell RMB 10/mt.

 

Trading in Shanghai spot tin market was muted as bearishness prevailed on Wednesday. Mainstream traded prices lost RMB 500/mt to RMB 122,000-126,000/mt. Yunxi brand tin traded at RMB 124,500/mt.  

 

SMM #1 nickel prices were between RMB 103,400-104,100/mt. Spot nickel prices in Shanghai plummeted due to growing supply. Downstream buyers took a wait-and-see attitude, with traded prices between RMB 103,300-104,000/mt. Despite rebounding LME nickel prices, spot nickel prices were stable in the afternoon. Downstream buyers purchased modestly on poor orders, with trading muted and traded prices between RMB 103,400-104,000/mt.