SMM Base Metals Market Daily Review (2015-6-30)

SHANGHAI, Jul. 1 (SMM) –

Copper
SHFE 1509 copper contract opened at RMB 42,340/mt and rose to RMB 42,470/mt but then fell quickly to RMB 42,250/mt before finishing the session at RMB 42,250/mt, up RMB 70/mt.

SHFE 1509 copper contract prices moved around RMB 42,200/mt and failed to break through RMB 42,300/mt. The prices finally closed at RMB 42,090/mt, down by RMB 90/mt. Trading volumes fell by 18,296 lots and positions increased 21,994.

Spot copper traded RMB 200-270/mt higher than SHFE 1507 copper in Shanghai Tuesday morning and the premiums narrowed slightly in the afternoon to RMB 200-230/mt due to poor trades. Standard-quality copper settled at RMB 42,650-42,770/mt and RMB 42,680-42,800/mt for high-quality copper.

Markets turned to be quiet on this last trading day of middle 2015. Some cash-hungry cargo holders continued to ship goods out but few deals were made. Some traders entered market with spot premium narrowing. Downstream buyers watched from sideline under pressures from tight liquidity.

Aluminum
On Tuesday, SHFE nickel opened at a daily downside limit, souring sentiment in base metals market. This caused SHFE 1509 aluminum contract to plunge to RMB 12,560/mt. The light metal rebounded in the afternoon, but failed to break through the daily moving average, closing at RMB 12,625/mt. Trading volumes totaled 49,992 lots, and positions were up 5,748 lots to 124,950 lots.

Spot aluminum largely traded between RMB 12,480-12,490/mt in Shanghai on Tuesday, discounts of RMB 80-110/mt over SHFE 1507 aluminum contract, versus RMB 12,470-12,490/mt in Wuxi, and RMB 12,500-12,520/mt in Hangzhou. SHFE 1507 aluminum fell sharply, triggering strong pessimism in spot market. The month-end cash crunch depressed buying. Holders of hedged goods rushed to sell. In the afternoon, trading remained light.

Lead
SHFE 1508 lead moved in a range of RMB 12,710-12,800/mt during Monday evening session.

The contract advanced to RMB 12,920/mt during morning session Tuesday as good news appeared that China’s pension funds in individual accounts of basic old-age pension can be used in securities investment and that stamp tax is lowered. But the price fell to RMB 12,800-12,830/mt due to dropping stocks and finished at RMB 12,795/mt, losing RMB 205/mt. Trading volumes totaled 4,462 lots and positions rose 744 to 13,850.

In Shanghai’s spot market, traded price were RMB 370/mt higher than SHFE 1508 lead at RMB 13,200/mt for Nanfang and Tongguan brands with the price quoting at RMB 13,230/mt earlier.

Smelters still held back sales while traders were keen to sell spot lead to buy futures with spot premiums up. Few downstream buyers purchased owing to tight liquidity on the last day of June.

Zinc
SHFE 1509 zinc contract prices opened at RMB 15,600/mt, then remained flat and closed at RMB 15,550/mt, down RMB 80/mt. SHFE 1509 zinc contract prices fluctuated between RMB 15,550/mt on Friday, and fell sharply in the afternoon, dipping to RMB 15,380/mt, and closing at RMB 15,400/mt, down RMB 230/mt or 1.47%. Trading volumes increased 26,620 to 104,818 lots, and total positions grew 7,466 to 124,436. SHFE 1509 zinc contract prices will fall more slowly and test support from RMB 15,400/mt.

#0 zinc prices were between RMB 15,340-15,380/mt, RMB 0-30/mt above SHFE 1509 zinc contract prices. #1 zinc prices were RMB 15,300-15,340/mt. SHFE 1509 zinc contract prices fluctuated between RMB 15,340-15,350/mt, down RMB 200/mt, with spot premiums between RMB 20-50/mt in the morning, but turning to RMB 0-30/mt due to oversupply. Cargo holders liquidated inventories due to repayment for banks, leaving supply ample. Traders and downstream buyers took a wait-and-see attitude, with trading muted. SHFE 1509 zinc contract prices fell to RMB 15,220/mt in the afternoon, but cargo holders sold proactively on cash tightness, with spot premiums between RMB 0-30/mt against SHFE 1509 zinc contract prices.

Tin
In Shanghai spot tin market, mainstream traded prices followed SHFE tin down further to RMB 111,500-113,500/mt on June 30. Goods from Yunnan Tin Group traded at RMB 114,500-115,000/mt. Cheap hedged goods flowed in, dragging down overall prices.

Nickel
SMM #1 nickel prices were between RMB 83,900-85,500/mt. SHFE nickel prices fell in the morning, and traders replenished stocks proactively. Premiums of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading rose to RMB 300/mt in the morning. Discounts of Russian nickel against Jinchuan nickel were RMB 700/mt, with downstream buyers purchasing at lows and causing trading to improve. Traded prices were between RMB 81,500-82,800/mt. Premiums of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading rose to RMB 500/mt in the afternoon, while discounts of Russian nickel contracted to RMB 500/mt. Cargo holders sold actively, with trading brisk. Jinchuan Group left price unchanged yesterday.