SMM Daily Review (Oct. 29)

SHANGHAI, Oct. 30 (SMM) --

    Copper:

    SHFE copper prices opened low and went lower, and moved below the daily average line today. SHFE spot-month contract copper prices fell from RMB 50,000/mt to RMB 49,920/mt in the afternoon, but closed at RMB 50,000/mt. Positions of three-month contract declined by more than 12,000 lots, with very limited price gap between different contracts.

    In spot market, spot discounts narrowed to RMB 100/mt, and spot discounts for high-quality copper like "Guixi" brand copper were RMB 70-80/mt, while discounts for domestic parity copper were RMB 120-150/mt. Spot discounts widened slightly in the afternoon with sliding LME copper prices. A number of producers were willing to move goods to generate cash for bank loan by the end of October, resulting in improved transactions. Copper prices will move around RMB 50,000/mt.

    Aluminum:

    SHFE aluminum prices opened low and went lower, and moved in the very narrow range today. Positions declined sharply due to profit-takings of short players. SHFE three-month contract aluminum prices dropped by nearly 1.8% and closed at RMB 15,120/mt, while SHFE spot-month contract aluminum prices remained below RMB 15,000/mt.

    In spot market, spot discounts were about RMB 50/mt in the morning as CHALCO did not move goods, but prices for imported aluminum from Rusal declined first, reducing domestic aluminum prices to RMB 14,870/mt, and spot discounts expanded to RMB 70/mt as well. Purchases were very limited in the market. CHALCO has moved large amount of goods during October, greatly easing its inventory pressure. LME aluminum prices are expected to stabilize with the onset of November, and domestic aluminum prices will return to the previous moving range, and will still meet great pressure at RMB 15,000/mt.

    Lead:

    In Shanghai lead market, SMM reduced lead prices by RMB 100/mt to the range of RMB 15,700-15,900/mt. The sell-off activities by traders appeared in the market again, dragging down actual traded prices to RMB 15,600/mt, which may be related to the producers' sell-off behavior to generate cash for bank loan by the end of October. Whether or not domestic lead prices can stand firm at RMB 15,600/mt will depend on LME lead price trends.

    Zinc:

    SHFE zinc prices opened low and went lower, and SHFE three-month contract zinc prices climbed to RMB 16,550/mt, but still down 3.3% compared to yesterday levels. Positions declined by 9,542 lots. SHFE spot-month contract zinc prices stood firm at RMB 16,200/mt in the morning.

    In spot market, spot discounts for #0 zinc against spot-month contract narrowed to RMB 100/mt, with traded prices in the RMB 16,100-16,150/mt range, and downstream purchases increased.

    Tin:

    In Shanghai tin market, traders still moved low-quality tin at RMB 116,500-117,000/mt. High-quality tin holders also reduced offers to RMB 117,500-118,000/mt, but transactions were very limited. The wait-and-see attitude is dominating the market players by month-end.

    Nickel:

    In Shanghai nickel market, nickel prices dropped below RMB 130,000/mt today. Imported nickel prices were RMB 129,000/mt, while Jinchuan nickel prices tried to stand firm at RMB 130,000/mt, but later fell below its ex-works prices again negatively affected by low-priced Russia nickel. Special attention should be paid to the ex-works price adjustment by Jinchuan Group during the weekend.

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