Metals News
SMM Daily Review (Nov. 10)
smm insight
Dec 7,2009

SHANGHAI, Nov. 11 (SMM) --


    SHFE copper prices opened low and moved stably. Copper futures for January delivery remained at RMB 51,150/mt in the morning, while copper futures for February delivery were RMB 51,300/mt. In the afternoon, SHFE three-month contract copper prices fell from RMB 51,000/mt to the range of RMB 50,750-50,850/mt, while SHFE spot-month contract copper prices stabilized at RMB 50,500/mt.

    Today, spot market remained strong. Spot discounts for premium copper moved from RMB 50/mt to RMB 0/mt in the morning, with traded prices in the RMB 50,800-50,850/mt range. A portion of imported copper holders were reluctant to sell goods due to drops in traded prices compared with yesterday levels. Spot discounts for parity copper were RMB 50-100/mt, with traded prices around RMB 50,750/mt, and transactions were worse than yesterday. Spot copper prices remained stable in the afternoon in view of plunged SHFE copper prices. Both traders and consumers took a cautious view, as struggles between long and short positions intensified at current levels.


    SHFE aluminum prices opened high and remained stable in the morning, but plunged in the afternoon. SHFE three-month contract aluminum prices faced resistance at RMB 15,200/mt, and closed at RMB 15,100/mt, and the price spread between spot-month contract and three-month contract narrowed. Positions of three-month contract declined by nearly 10,000 lots. SHFE spot-month contract aluminum prices stood firm at RMB 14,900/mt, with a sign that long positions will withdraw from the market. 

    In spot market, offers were RMB 14,870-14,880/mt in the morning, and transactions were slim. Prices for imported aluminum from India fell from RMB 14,850/mt to RMB 14,820/mt. In this context, a number of domestic aluminum holders also reduced selling prices to RMB 14,850-14,860/mt, but transactions remained weak. Aluminum prices faced great pressure at RMB 14,900/mt as the delivery date nears, an indication of supply pressure and weak consumption in aluminum market.


    Weak performance of LME lead prices last night depressed market player confidence in Shanghai lead market, and domestic lead holders reduced offers to RMB 15,400/mt, an indication that they lost confidence in lead prices at RMB 15,500/mt. Lead prices will likely fall rapidly if LME lead prices continue to slip tonight. 


    SHFE zinc prices opened low. SHFE three-month contract zinc prices moved around RMB 16,850/mt in the morning, but fell to RMB 16,650/mt in the afternoon, while SHFE spot-month contract zinc prices dipped to RMB 16,300/mt, and the price spread between soon-to-expire contract and forward contract narrowed increasingly.

    In spot market, SMM zinc prices remained unchanged. #1 zinc was traded at RMB 16,400/mt in the morning, and #0 zinc was traded at RMB 16,450/mt, and the downstream purchasing interest was low. The trading sentiment was lackluster in the afternoon given declines in SHFE zinc prices.


    In Shanghai tin market, offers for low-quality tin were RMB 114,500/mt, and offers for high-quality tin were lowered to RMB 116,500-117,000/mt reluctantly, but transactions remained weak given sluggish downstream consumption.


    In Shanghai nickel market, offers for goods from Jinchuan Group remained at RMB 129,000-129,500/mt, while offers for imported nickel were RMB 129,000/mt. Cargo-holders were unwilling to lower prices further, resulting in lukewarm trading sentiment. Traders and downstream consumers were reluctant to replenish stocks due to the pessimistic market sentiment.


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