Metals News
SMM Daily Review (Nov. 24)
smm insight
Dec 7,2009

SHANGHAI, Nov. 25 (SMM) --


    Today, SHFE copper prices traced LME copper prices in the morning, and moved higher along with daily moving average line. Open positions of March-delivery contract reached more than 80,000 lots at noon, and copper for March delivery climbed to RMB 55,150/mt, while SHFE three-month contract copper prices inched up to RMB 54,880/mt. However, SHFE three-month contract copper prices dropped by 1.6% in the afternoon negatively affected by plunged stock markets. SHFE spot-month contract copper prices fluctuated around RMB 54,250/mt in the morning, and fell from RMB 54,000/mt to RMB 53,500/mt in the afternoon, and closed at RMB 53,700/mt finally.

    In spot market, the optimistic sentiment still dominated market players in the morning, and spot discounts ranged from RMB 300/m to RMB 200/mt, with traded prices moving in the RMB 53,900-54,000/mt range, and cargo-holders held optimistic views on copper prices and were reluctant to move goods. Traded prices dropped to the range of RMB 53,500-53,800/mt in the afternoon as SHFE copper prices slumped, but spot discounts narrowed to RMB 150-200/mt as well given the reluctance by cargo-holders to sell goods. Copper prices have risen for four consecutive days since Monday, so it is reasonable copper prices will meet some reductions, but copper prices will remain in upward track based on technical indicators and market sentiment. Particular attention should be paid to changes in spot discounts in the near future. 


    LME aluminum prices fell below 5-day moving average line and closed at USD 2,025/mt. SHFE aluminum prices opened low and moved around RMB 15,750/mt in the morning, while SHFE spot-month contract aluminum prices fluctuated at RMB 15,400/mt. However, long players closed positions in the afternoon along with plunging A-share stock markets, and positions of three-month contract dropped by more than 17,000 lots, and SHFE three-month contract aluminum prices closed at RMB 15,500/mt, while SHFE spot-month contract aluminum prices stabilized at RMB 15,250/mt. Although SHFE aluminum prices closed at 5-day moving average line, technical indicators showed negative directions, so SHFE aluminum prices will likely fall further tomorrow.

    In spot market, spot discounts widened to RMB 250/mt. Traded prices remained stable at RMB 15,150/mt in the morning, and only limited deals of famous brands were done, as downstream consumers still held a wait-and-see attitude. SHFE aluminum prices slumped in the afternoon, and it will take some time for spot aluminum prices to stand firm at RMB 15,100/mt after fell below RMB 15,000/mt. 


    In Shanghai lead market, SMM lead prices increased by RMB 200/mt to the range of RMB 16,000-16,200/mt, as LME lead prices closed up USD 37/mt last night. Smelters were firm with their offers, with traded prices around RMB 16,000/mt, while downstream purchase interest would become lower when lead prices approached to RMB 16,000/mt. 


    Transactions were brisk in SHFE zinc market, as investors have accepted previous gains in zinc prices. All contracts zinc prices dropped, with positions down more than 29,000 lots, but trading volumes still increased. SHFE three-month contract zinc prices fell from RMB 18,500/mt and closed at RMB 18,160/mt, and are expected to fall below RMB 18,000/mt tomorrow, while SHFE spot-month contract zinc prices fell below RMB 18,000/mt and closed at RMB 17,765/mt, and are expected to fall further to test RMB 17,500/mt tomorrow.

    In spot market, SMM offers for #0 zinc were RMB 17,550-17,650/mt, and spot premiums existed in the market, with traded prices climbing to the range of RMB 17,700-17,750/mt. Transactions were brisk, and optimistic sentiment still dominated market players. However, both downstream consumers and traders stood on the sidelines along with falling SHFE zinc prices. Both SHFE zinc prices and spot zinc prices increased too fast, and limited reductions will be needed for zinc prices in an attempt to minimize risks from higher price range. Spot goods holders remained optimistic over future market, with limited inventories in hand.


    LME tin prices failed to boost Shanghai tin market, and famous brands holders had to reduce prices constantly to move goods, leaving mainstream traded prices in the RMB 115,500-116,500/mt range. Overall market remained neutral, as no unknown brands were available currently.


    In Shanghai nickel market, supply of goods from Jinchuan Group was ample, and suppliers were eager to move goods in order to generate cash as long as profits could be available, with traders as main buyers. However, LME nickel prices dropped in the afternoon, depressing trader purchase interest and leaving neutral trading sentiment. The price spread between domestic and imported nickel was only RMB 500/mt, leaving almost no profit margins for imported nickel.


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