Metals News
SMM Daily Review (Oct. 27)
smm insight
Dec 7,2009

SHANGHAI, Oct. 28 (SMM) --


    SHFE copper prices showed weak performance today, and SHFE spot-month contract copper prices kept moving below daily average line, making RMB 51,000/mt as a new resistance level. Positions of three-month contract declined by more than 26,000 lots, and long players closed positions to minimize market risks.

    In spot market, the drops in SHFE copper prices dampened market sentiment in the morning, and consumers took a more cautious view, but cargo-holders remained firm. Spot discounts narrowed to the range of RMB 200-350/mt, with traded prices standing firm at RMB 50,450-50,650/mt. Transactions improved gradually upon bullish LME copper market. Today, cargo movement of parity copper dropped, but premium copper was traded actively.


    SHFE aluminum prices opened low and went lower. SHFE spot-month contract aluminum prices received greater resistance at RMB 15,000/mt, while SHFE three-month contract aluminum prices faced pressure at RMB 15,200/mt, with positions down slightly.

    In spot market, traders kept their offers firm at RMB 14,940/mt in the morning, with discounts of RMB 20-30/mt, but CHALCO sold goods at RMB 14,900/mt at noon, reducing offers quoted by other traders, and spot discounts widened to RMB 50/mt as a result.


    In Shanghai lead market, SMM lowered lead prices by RMB 100/mt to the range of RMB 15,800-16,000/mt, and smelters and downstream consumers held different views on market outlook. Today, actual traded prices were RMB 15,800-15,900/mt, only limited aluminum was quoted at RMB 16,000/mt, but no deals were done.


    SHFE zinc prices fluctuated widely today. SHFE three-month contract zinc prices received support at RMB 17,000/mt and climbed to RMB 17,200/mt in the morning, making zinc as the only metal with upward momentum among base metals, but the strong performance of SHFE zinc prices helped squeeze the profits of arbitrageurs.

    Today, SMM offers for #0 zinc were RMB 16,450-16,550/mt, with actual traded prices at RMB 16,500-16,600/mt. SHFE spot-month contract zinc prices moved below RMB 17,000/mt, at RMB 16,750/mt. Spot discounts returned to RMB 200/mt. The shot-term reductions in zinc prices hampered the purchasing interest of consumers, so transactions were limited despite of growing inquiries. Zinc market still maintained strong upward momentum and zinc prices have entered a new fluctuation range.


    In Shanghai tin market, Yunnan Tin Group raised offers to RMB 120,000/mt again, and offers for "Yunshan" and "Yunheng" tin increased as well to RMB 119,000/mt. Traders also lifted offers due to limited inventories, and traded prices have risen to the range of RMB 117,500-118,500/mt as well. However, end-users held a wait-and-see attitude with regard to price hike, and traders were cautious about stock replenishment when prices were high as well, bringing the market to a standstill.


    In Shanghai nickel market, traded prices for Jinchuan nickel have dropped to its ex-works prices of RMB 132,000/mt, and the pessimistic sentiment in LME nickel market raised traders' interest in sell-off activities. In the context, imported nickel was traded at RMB 131,000/mt reluctantly, and transactions were scarce.


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