SMM Daily Review - 2010/3/5 Base Metals Market -Shanghai Metals Market

Hot Keywords

  • Nickel market
  • Market commentary
  • Silicon
  • zinc
  • Copper
  • Aluminium
  • Production data
  • Inventory data
  • Zinc
  • Stainless steel
  • Sales data
  • Nickel
  • Morning comments
  • Silicon metal
  • Nickel pig iron

SMM Daily Review - 2010/3/5 Base Metals Market

SMM Insight 10:37:32AM Mar 08, 2010 Source:SMM

SHANGHAI, Mar. 8 (SMM) -- 
Copper
On Friday, SHFE June-Delivery copper contract opened lowly at RMB 59,380/mt due to a falling LME copper market, and moved upward in the afternoon business, reaching as high as RMB 59,970/mt. The most active copper contract closed at RMB 59,870/mt following a lower China A-shares market, flat with the previous level.

Spot discounts in the copper market narrowed further. During the major trading period, discounts for high-quality copper were at negative RMB 150-100/mt, with deals mainly done in the RMB 58,800-59,050/mt. Discounts for standard-quality copper were at negative RMB 200-150/mt, and transactions were largely made in the RMB 58,750-58,900/mt range. Discounts for hydro-copper were around negative RMB 300- 250/mt.

The SHFE/LME copper price ratio fell back following a stronger LME copper and a weaker SHFE copper market recently, with declines in supply of imports. As a result, market supply was not as ample as that in earlier week. Market player sentiment was improved by the fact that copper prices did not weaken, and continued to fluctuate. Downstream purchasing demand is expected to improve after gradual consumption of its existing inventories. At present, two national legislative policy meetings, NPC and CPPCC are now underway in China, and market players will be attentive to any new policies. Next week, spot discounts will change into spot premiums following the upcoming delivery, and the low-end traded prices of copper will increase in response. 

Aluminum
On March 5th, SHFE 1006 aluminum contract prices opened high at RMB 16,860/mt, and later advanced to the highest level at RMB 16,920/mt. However, the weak performance of other metals prices trends allowed SHFE aluminum prices to fall, but later SHFE aluminum prices moved higher supported by rebounding the benchmark Shanghai Composite Index at noon, with prices finally closing at RMB 16,890/mt, up RMB 35/mt compared with the previous trading day, or up 0.21%. Technically, SHFE 1006 aluminum contract prices moved around 5-day moving average. Traders in the spot market were optimistic toward market outlook, and although inventory pressure remained high, lower-priced goods declined gradually, and the higher downstream buying interest signals end consumption has shown signs of recovery. 


Lead
Thin trading sentiment in the domestic lead market failed to improve during the last trading day of the week. Although domestic lead producers were not resolute in maintaining prices at RMB 16,000/mt, with low-end traded prices in the Shanghai market down to RMB 15,600/mt on Friday, downstream producers made no positive response due to low operating rates from no improvement in orders, leaving limited buying interest.   

If the issue of staff recruitment at downstream producers is able to be resolved, their production will return to normal levels, which will speed up consumption of existing stocks. As a result, trading sentiment will improve in the coming week.

Zinc
On March 5th, SHFE three-month zinc contract prices fluctuated higher after opening low, and moved around RMB 18,300/mt, with struggles between long and short positions remaining intense. Spot zinc market reported no improvement during weekend, and spot discounts for #0 zinc expanded from RMB 550/mt to a range of RMB 600-650/mt against SHFE 1006 zinc contract under the context of sufficient market supply and high selling interest, with traded prices mainly moving in the RMB 17,700-17,750/mt range, while #1 zinc was traded between RMB 17,650-17,700/mt.

Zinc prices advanced rapidly to RMB 18,550/mt from 11:15, and offers were very limited in the market, with the wait-and-see sentiment dominating the market. SHFE zinc prices remained high at noon, but traders became reluctant to sell goods, and #0 zinc was traded around RMB 17,900/mt, but trading volumes were very limited. Although most market players believe any downward movements for zinc prices will be limited, zinc price movements remain neutral before the market consumption fully recovers.


Tin
On March 4th, LME tin prices fluctuated on downward track due to profit-taking after hitting a monthly high, with tin prices closing at USD 17,280/mt, slightly down USD 65/mt. Prices reached highest level of USD 17,850/mt and touched lowest level at USD 17,150/mt, with daily fluctuation of USD 700/mt. On March 5th, long positions and short positions struggled, and there were still no transactions in the market in the afternoon session on electronic trading.

Inspired by a recently new high of LME tin prices, domestic tin producers' confidence in keeping offers firm strengthened, and they all lifted offers above RMB 141,000/mt. On March 5th, traders kept their offers at rational levels, with mainstream offers in the RMB 141,500-142,000/mt range. However, inquiries from downstream buyers were extremely rare, resulting in sluggish trading sentiment, and with mainstream traded prices in the RMB 141,000-141,500/mt range.

Nickel
On March 4th, LME three month nickel contract prices closed at USD 22,375/mt, down USD 275/mt, and prices once fell sharply to USD 22,000/mt after profit-taking. On March 5th, LME nickel prices opened at USD 22,400/mt, and prices fluctuated widely, with transactions mainly made at daily low level prices. LME nickel prices rose robustly to test USD 22,500/mt after 15:30, and prices experienced corrections at high levels later. Technically, LME nickel prices lacked obvious resistance level.

In the Shanghai nickel market, overall trading sentiment was moderate, and transactions were mainly made among traders on March 5th. Cargo-holders who had built stocks previously were eager to move goods due to high profits, and supply of goods were ample in the market, with traded prices of imported nickel at RMB 161,000/mt and traded prices of nickel from Jinchuan Group at RMB 161,500/mt. Transactions were mainly made by speculators to seek arbitrage, and end users mainly adopted at wait-and-see attitude, purchasing goods slowly and cautiously.


To contact the writer on this report: Angelawang@smm.cn

 

Copyright © SMM. All Rights Reserved

None of this material may be used for any commercial or public use in any forms or means, without the prior written consent of SMM. For reproduction issue, please contact us by email: service.en@smm.cn

Key Words:  base metal  LME market   SHFE market 

SMM Daily Review - 2010/3/5 Base Metals Market

SMM Insight 10:37:32AM Mar 08, 2010 Source:SMM

SHANGHAI, Mar. 8 (SMM) -- 
Copper
On Friday, SHFE June-Delivery copper contract opened lowly at RMB 59,380/mt due to a falling LME copper market, and moved upward in the afternoon business, reaching as high as RMB 59,970/mt. The most active copper contract closed at RMB 59,870/mt following a lower China A-shares market, flat with the previous level.

Spot discounts in the copper market narrowed further. During the major trading period, discounts for high-quality copper were at negative RMB 150-100/mt, with deals mainly done in the RMB 58,800-59,050/mt. Discounts for standard-quality copper were at negative RMB 200-150/mt, and transactions were largely made in the RMB 58,750-58,900/mt range. Discounts for hydro-copper were around negative RMB 300- 250/mt.

The SHFE/LME copper price ratio fell back following a stronger LME copper and a weaker SHFE copper market recently, with declines in supply of imports. As a result, market supply was not as ample as that in earlier week. Market player sentiment was improved by the fact that copper prices did not weaken, and continued to fluctuate. Downstream purchasing demand is expected to improve after gradual consumption of its existing inventories. At present, two national legislative policy meetings, NPC and CPPCC are now underway in China, and market players will be attentive to any new policies. Next week, spot discounts will change into spot premiums following the upcoming delivery, and the low-end traded prices of copper will increase in response. 

Aluminum
On March 5th, SHFE 1006 aluminum contract prices opened high at RMB 16,860/mt, and later advanced to the highest level at RMB 16,920/mt. However, the weak performance of other metals prices trends allowed SHFE aluminum prices to fall, but later SHFE aluminum prices moved higher supported by rebounding the benchmark Shanghai Composite Index at noon, with prices finally closing at RMB 16,890/mt, up RMB 35/mt compared with the previous trading day, or up 0.21%. Technically, SHFE 1006 aluminum contract prices moved around 5-day moving average. Traders in the spot market were optimistic toward market outlook, and although inventory pressure remained high, lower-priced goods declined gradually, and the higher downstream buying interest signals end consumption has shown signs of recovery. 


Lead
Thin trading sentiment in the domestic lead market failed to improve during the last trading day of the week. Although domestic lead producers were not resolute in maintaining prices at RMB 16,000/mt, with low-end traded prices in the Shanghai market down to RMB 15,600/mt on Friday, downstream producers made no positive response due to low operating rates from no improvement in orders, leaving limited buying interest.   

If the issue of staff recruitment at downstream producers is able to be resolved, their production will return to normal levels, which will speed up consumption of existing stocks. As a result, trading sentiment will improve in the coming week.

Zinc
On March 5th, SHFE three-month zinc contract prices fluctuated higher after opening low, and moved around RMB 18,300/mt, with struggles between long and short positions remaining intense. Spot zinc market reported no improvement during weekend, and spot discounts for #0 zinc expanded from RMB 550/mt to a range of RMB 600-650/mt against SHFE 1006 zinc contract under the context of sufficient market supply and high selling interest, with traded prices mainly moving in the RMB 17,700-17,750/mt range, while #1 zinc was traded between RMB 17,650-17,700/mt.

Zinc prices advanced rapidly to RMB 18,550/mt from 11:15, and offers were very limited in the market, with the wait-and-see sentiment dominating the market. SHFE zinc prices remained high at noon, but traders became reluctant to sell goods, and #0 zinc was traded around RMB 17,900/mt, but trading volumes were very limited. Although most market players believe any downward movements for zinc prices will be limited, zinc price movements remain neutral before the market consumption fully recovers.


Tin
On March 4th, LME tin prices fluctuated on downward track due to profit-taking after hitting a monthly high, with tin prices closing at USD 17,280/mt, slightly down USD 65/mt. Prices reached highest level of USD 17,850/mt and touched lowest level at USD 17,150/mt, with daily fluctuation of USD 700/mt. On March 5th, long positions and short positions struggled, and there were still no transactions in the market in the afternoon session on electronic trading.

Inspired by a recently new high of LME tin prices, domestic tin producers' confidence in keeping offers firm strengthened, and they all lifted offers above RMB 141,000/mt. On March 5th, traders kept their offers at rational levels, with mainstream offers in the RMB 141,500-142,000/mt range. However, inquiries from downstream buyers were extremely rare, resulting in sluggish trading sentiment, and with mainstream traded prices in the RMB 141,000-141,500/mt range.

Nickel
On March 4th, LME three month nickel contract prices closed at USD 22,375/mt, down USD 275/mt, and prices once fell sharply to USD 22,000/mt after profit-taking. On March 5th, LME nickel prices opened at USD 22,400/mt, and prices fluctuated widely, with transactions mainly made at daily low level prices. LME nickel prices rose robustly to test USD 22,500/mt after 15:30, and prices experienced corrections at high levels later. Technically, LME nickel prices lacked obvious resistance level.

In the Shanghai nickel market, overall trading sentiment was moderate, and transactions were mainly made among traders on March 5th. Cargo-holders who had built stocks previously were eager to move goods due to high profits, and supply of goods were ample in the market, with traded prices of imported nickel at RMB 161,000/mt and traded prices of nickel from Jinchuan Group at RMB 161,500/mt. Transactions were mainly made by speculators to seek arbitrage, and end users mainly adopted at wait-and-see attitude, purchasing goods slowly and cautiously.


To contact the writer on this report: Angelawang@smm.cn

 

Copyright © SMM. All Rights Reserved

None of this material may be used for any commercial or public use in any forms or means, without the prior written consent of SMM. For reproduction issue, please contact us by email: service.en@smm.cn

Key Words:  base metal  LME market   SHFE market