SHANGHAI, Jun. 18 (SMM) --
On Thursday, SHFE copper prices rallied at open to catch up price gains on the LME market during the Chinese Dragon Boat Festival holiday, but later lacked of upward momentum, and were pressed below the daily average moving for the whole day. After 11:00 am, SHFE copper prices were plagued further by a falling China's A-shares market, and gave up most of gains at the closing. SHFE delivery for three month delivery briefly touched RMB 52,680/mt after opening at RMB 52,600/mt, and later dropped all the way. In the afternoon session, SHFE September delivery copper prices dropped as low as RMB 51,600/mt, before ending at RMB 51,670/mt, up 0.62%, and an increase of RMB 320/mt compared with pre-holiday level, much slower than LME copper price gains. SHFE copper prices are now moving in the 20 and 30-day moving average, but support for SHFE September delivery copper prices below the 10-day moving average is weak. Meanwhile, increases of positions on the SHFE copper market contracted, a sign of low market interest in chasing highs, reflecting low market confidence towards outlook. Hence, SMM believes SHFE September delivery copper prices will move around RMB 51,500/mt in the short term.
In the spot market, falling SHFE copper prices depressed market buying interest. Thursday is the last trading day for SFHE June delivery copper contract, but spot premiums were even below positive RMB 100/mt. Except high-quality domestic copper at premiums of positive RMB 20~50/mt, with no deals reported, high-quality imported copper was traded at premiums of RMB 0/mt, and imported hydro-copper was dealt at discounts as low as negative RMB 150/mt. Transactions in the morning business were done between RMB 52,400-52,700/mt, and traded prices fell in the afternoon trade due to further declines on the SHFE copper market, with deals made in the RMB 52,000-52,250/mt range. Downstream producers stood on the sidelines, given lack of upward momentum for copper prices at above RMB 52,000/mt, and unstable markets in the EU and US. SMM believes spot copper prices will likely return to fluctuate in the RMB 51,500-52,500/mt on Friday.
LME aluminum prices have risen by nearly 3% during the Chinese Dragon Boat Festival holiday, and SHFE aluminum prices opened higher in the morning session in response, but later slipped all the way, with prices mainly moving below the daily moving average. SHFE 1009 aluminum contract prices opened higher at RMB 14,860/mt, but later dipped after surging to RMB 14,870/mt, and then accelerated the drops negatively affected by falling domestic A-shares market during the spot trading period. SHFE 1009 aluminum contract prices dipped to RMB 14,570/mt, and finally closed at RMB 14,580/mt, with prices expected to test the 5-day moving average of RMB 14,500/mt.
Yesterday (June 17th) was the last trading day of SHFE 1006 aluminum contract, and the price spread between SHFE 1006 aluminum contract and SHFE 1007 aluminum contract almost disappeared. SHFE aluminum prices closed with decline yesterday, and whether or not SHFE 1009 aluminum contract prices can stand at RMB 14,500/mt will depend on LME aluminum price movements. The US dollar index rebounded slightly to 86.50 during the Asian trading period, and LME aluminum prices fell from USD 2,000/mt to USD 1,955/mt, and although the US dollar index fell to a range of 30-day and 60-day moving averages, technical indicators show any downward movements in LME aluminum prices will be limited. The US government will release a series of important economic data, which will direct the US stocks and metals prices.
In the spot market, different views held by suppliers and downstream consumers intensified as yesterday was the last trading day of SHFE 1006 aluminum contract. Cargo-holders mainly made deals at the level flat at SHFE 1006 aluminum contract prices before SHFE aluminum prices accelerated the drops, and later traded prices declined all the way as SHFE aluminum prices slipped directly despite that cargo-holders kept offers firm at a slight premium of RMB 20/mt. Traded prices moved between RMB 14,380-14,400/mt in the morning, and later slipped to RMB 14,350/mt at noon, and even fell to a range of RMB 14,300-14,330/mt in the afternoon. Downstream consumers stayed out of the market amid weakening aluminum prices, and spot discounts may appear again after transitioning into a new contract month. Purchasing costs are expected to fall to a range of RMB 14,250-14,300/mt on June 18th, and SHFE 1007 aluminum contract prices are expected to fluctuate between RMB 14,300-14,400/mt.
On Thursday, domestic lead prices rallied to catch up with some gains on the LME copper market during the Chinese Dragon Boat Festival holiday. In the morning, offers were generally quoted between RMB 14,300-14,400/mt in the Shanghai market, but trading sentiment was lackluster, along with depressed LME lead prices during early Asian trading hours and low downstream acceptance towards prices. In the afternoon business, prices fell to RMB 14,250-14,300/mt due to no improvement on the LME lead market. Currently, domestic lead producers continue to hold goods back, leaving little room for traders when quoting prices. Transactions in the Shanghai market were traded in the RMB 14,300-14,400/mt range.
SHFE 1009 zinc contract prices moved higher after opening high at RMB 14,695/mt, but mainly moved below the daily moving average, with the lowest prices reported at RMB 14,255/mt. Positions increased by 25,000 lots, with short position momentum stronger than long position momentum, which will hamper any upward movements in SHFE 1009 zinc contract prices.
Trading sentiment was bearish in spot markets on the first trading day after the Chinese Dragon Boat Festival holiday. Downstream consumers preferred to stand on the sidelines in anticipation of lower prices amid current sluggish SHFE zinc price movements. Traders said #0 zinc was mainly traded around RMB 14,250/mt in the morning in Shanghai market. Trading volumes were very limited in the afternoon following falling SHFE zinc prices.
LME tin prices opened at USD 17,650/mt and closed at USD 17,750/mt on June 16th, up USD 150/mt from a day earlier, with highest price at USD 17,800/mt, and the lowest price at USD 17,500/mt. Daily trading volumes were 250 lots and positions were 17,420 lots. LME tin prices shaved previous losses and rose steadily to hit a new high set on June 3rd. On June 17th, LME tin prices opened at USD 17,850/mt and fluctuated weakly to test USD 17,560/mt. The US index climbed slightly to the latest 86.3.
In the Shanghai tin spot market, enquiries increased to certain extent under the context that LME tin prices gradually stabilized and climbed up, and traders told that transactions improved to certain extent. However, wait-and-see sentiment still lingered, resulting in limited trading volumes. Traders lifted tin prices slightly along with smelters, and traded prices gradually climbed. Major brand tin dominated market supply, with traded prices between RMB 138,000-140,000/mt and traded prices of unknown brand tin between RMB 137,500-138,700/mt.
LME nickel prices opened at USD 20,300/mt and closed at USD 19,950/mt on June 16th, with the highest price at USD 20,550/mt and the lowest price at USD 19,610/mt. Daily trading volumes were 2,100 lots and positions were 89,100 lots. On June 17th, LME nickel prices opened low at USD 19,730/mt and moved downward between 5-day and 10-day moving average, with highest price at USD 19,730/mt and the lowest price at USD 19,360/mt. The US index climbed slightly to the latest 86.3.
In the Shanghai nickel spot market, transactions were sluggish. Spot prices slipped along with LME nickel prices, but the price decline failed to boost market transactions. Transactions were dominated by nickel from Jinchuan Group, with few transactions of imported nickel reported in the market. Traded prices were between RMB 154,000-155,500/mt, with transactions dominated by traders.
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