SMM Daily Review (Nov. 25)

SHANGHAI, Nov. 26 (SMM) --

    Copper:

    SHFE copper prices experienced wide fluctuations today. SHFE copper prices soared in the morning, but dipped at noon negatively affected by falling A-share stock market. However, SHFE copper prices climbed in the afternoon supported by recovering A-share stock market, and positions of March-delivery contract increased by more than 18,000 lots, and copper for March delivery stood above RMB 55,000/mt. SHFE forward contract copper prices inched up to RMB 56,000/mt, while SHFE spot-month contract copper prices moved in the RMB 53,800-54,200/mt range. Technically, SHFE copper prices will continue to move up after short-term reduction.

    In spot market, spot discounts narrowed to RMB 150-250/mt in the morning when SHFE copper prices fell. Although market sentiment was bearish compared to yesterday morning, and trading volumes declined in response, cargo-holders held an optimistic outlook and were reluctant to move goods, as spot discounts will likely disappear gradually next week. Traded prices were in the RMB 53,700-53,900/mt range in the morning, but climbed to the range of RMB 53,850-54,000/mt in the afternoon. Supply of imported copper declined, and offers for high-grade copper were firm, but transactions of standard-grade copper dropped. Spot copper prices will continue to test RMB 54,000/mt.

    Aluminum:

    SHFE aluminum prices fluctuated narrowly today, with limited downward room. SHFE aluminum prices were restricted by 5-day moving average line in the morning, but later inched up along with the recovering A-share stock market in the afternoon. SHFE three-month contract aluminum prices found solid support at RMB 15,550/mt, but faced pressure at RMB 15,700/mt, while aluminum for March delivery moved up to RMB 15,800/mt after stabilized at RMB 15,700/mt, and will climb to RMB 16,000/mt. Technically, aluminum prices will move in a narrow range today.

    Spot aluminum market was brisk. Traded prices dropped to RMB 15,080/mt from RMB 15,130/mt in the morning, but recovered to the range of RMB 15,120-15,150/mt in the afternoon, as the rising SHFE aluminum prices helped traders increase purchase volumes. Today, only limited deals were made by consumers.

    Lead:

    In Shanghai lead market, SMM lead prices remained unchanged. Well-known lead smelters kept their offers firm at RMB 16,000/mt, and prices for unknown brands were as low as RMB 15,850-15,900/mt. However, downstream consumers stood out of market, waiting for a clear market direction. 

    Zinc:

    SHFE zinc prices dipped, with positions down more than 10,000 lots. Technically, the optimistic market sentiment remained strong. Zinc for January delivery stood firm at RMB 18,000/mt, while zinc for February delivery was moving up to test RMB 18,500/mt, and will climb to RMB 19,000/mt or even RMB 20,000/mt in the long run. SHFE spot-month contract zinc prices faced great resistance at RMB 18,000/mt, and received support at RMB 17,750/mt.

    In spot market, suppliers were not eager to move goods when zinc prices dropped in the morning, with offers for #0 zinc at RMB 17,600/mt and offers for #1 zinc at RMB 17,550/mt. The rising SHFE zinc prices helped drive up spot zinc prices in the afternoon, raising cargo-holder unwillingness to move goods. Traded prices for #0 zinc are expected to inch up to test RMB 17,700/mt tomorrow.

    Tin:

    LME tin prices moved around USD 15,000/mt. In Shanghai tin market, the purchasing interest faded, while the wait-and-see attitude emerged, leaving neutral transactions of well-known brands. In this context, traded prices for well-known brands will remain unchanged at RMB 115,500-116,000/mt due to rising costs and limited sales.

    Nickel:

    In Shanghai nickel market, profit margins for goods from Jinchuan Group narrowed further, with prices at RMB 127,000/mt, and market surplus remained unchanged, hampering the cargo movement of imported nickel, and overall trading volumes were limited. 

Copyright © 2009, CBI (Shanghai) Co., Ltd. All Rights Reserved.

None of this material may be used for any commercial or public use in any form or means, without the prior written consent of CBI China. For reproduction issue, please contact us by email: metalresearch@cbichina.com or tel:86-21-51550040