SMM Daily Review (Oct. 21)

SHANGHAI, Oct. 22 (SMM) --

    Copper:

    SHFE copper prices opened below RMB 50,000/mt, and failed to find support above RMB 50,000/mt, and the trading volume dropped, but positions increased mildly. Copper prices have soared to above average lines, and dominant technical indicators showed an optimistic trend.

    In spot market, although SHFE copper prices fell by RMB 400/mt from yesterday levels, spot discounts remained in the RMB 200-300/mt range. Traded prices moved in the RMB 49,600-49,800/mt range, and the trading sentiment would be lower when copper prices were approaching to RMB 50,000/mt. Although SHFE copper prices maintained upward momentum, both the sell-offs to generate cash and expanding discounts along with rising SHFE copper prices dampened current spot market sentiment.

    Aluminum:

    SHFE aluminum prices continued to open low, and were restricted below RMB 15,000/mt. SHFE aluminum prices lacked upward momentum, but were easily affected by falling copper and zinc prices. In particular, SHFE spot-month contract aluminum prices kept moving below daily average line, with trading volume and positions down slightly.

    In spot market, mild fluctuations in SHFE aluminum prices failed to stimulate the consumption, and spot discounts for imported aluminum remained RMB 50/mt, although CHALCO stopped sell-off activities today. In this context, traded prices were RMB 14,780-14,830/mt for imported aluminum, and RMB 14,840-14,870/mt for domestic aluminum. A portion of low-iron aluminum was traded at RMB 14,880/mt with premiums of RMB 10/mt, but overall aluminum prices were soft.

    Lead:

    In Shanghai lead market, SMM lead prices stabilized at RMB 15,700/mt. Traded prices for high-end lead climbed to the range of RMB 15,750-15,800/mt, but mainstream traded prices were about RMB 15,700/mt. Both market confidence and attitude remained major factors for lead prices. LME lead prices remained strong, and domestic lead prices will follow suit after long-term fluctuations.

    Zinc:

    SHFE zinc prices showed a "W" shape today. SHFE three-month contract zinc prices faced great pressure at RMB 16,250/mt, and seem to find support at RMB 16,000/mt supported by strong LME zinc prices. However, SHFE spot-month contract zinc prices still struggled around RMB 15,900/mt.

    In spot market, SMM #0 zinc prices declined by RMB 50/mt to the range of RMB 15,650-15,750/mt, and traded prices increased to the range of RMB 15,700-15,750/mt from RMB 15,650/mt driven up by rising SHFE zinc prices at noon, and found solid support at RMB 15,500/mt. The low-end traded prices advanced gradually, market transactions remained neutral. Strong LME zinc prices boosted the optimistic sentiment, raising downstream purchasing interest.

    Tin:

    In Shanghai tin market, domestic tin prices met resistance at RMB 117,000/mt dampened by LME tin prices, and only selected smelters moved goods at lower prices in an attempt to generate cash, with goods mainly "Yunshan" and "YT" brands. 

    Nickel:

    In Shanghai nickel market, Jinchuan nickel experienced increasing sell-offs around its ex-works prices of RMB 134,000/mt, but deals were very limited. Imported nickel prices continued to struggle around RMB 133,000/mt. Nickel market was bearish.

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