SHAGNHAI, Jul. 22 (SMM) –SHFE 1109 copper contract prices opened down RMB 260/mt at RMB 72，360/mt on Thursday, with prices falling due to resistance during the whole trading day. SHFE three-month copper contract prices were pushed up to RMB 72,500/mt by the longs after opening lower in the morning business, reaching to RMB 72,670/mt briefly. Later, HSBC announced the preliminary manufacturing PMI data fell below 50 in July, dampening investment confidence and causing LME copper prices to fall twice. While the Shanghai Composite Index continued to make corrections, SHFE three-month copper contract prices dropped further and lost RMB 72,000/mt at the tail of trading, with a low level at RMB 71,930/mt. Finally, SHFE 1109 copper contract prices closed at RMB 72,000/mt, down RMB 610/mt or a loss of 0.84%. Similar to price movements in SHFE 1109 copper contracts, SHFE 1110 copper contract prices reached to a high level of RMB 72,970/mt, and closed at RMB 72,150/mt at the tail of trading, down RMB 680/mt. Positions for SHFE 1109 copper contracts were down 12,094 lots and trading volumes were down 18,530 lots, while positions and trading volumes for SHFE 1110 copper contracts were up 13,780 lots and 6,768 lots, respectively, completing the shift of the most actively-traded copper contracts. SHFE three-month copper contract prices would test RMB 72,000/mt due to strong sell-off pressures during the whole trading day and the low-end support retreating to the 10-day moving average.
In the spot market, copper discounts gradually reduced to negative RMB 300-200/mt from negative RMB 380-300/mt, as SHFE copper prices fell by nearly RMB 400/mt due to resistance in the morning business. Traded prices for standard-quality copper were between RMB 71,700-71,900/mt during the trading day, and RMB 71,800-72,100/mt for high-quality copper, with strong wait-and-see sentiment in the market. Cargo-holders showed unwillingness to sell at low prices after SHFE copper prices lost RMB 72,000/mt during trading hours, while downstream producers continued to stand on the sidelines, resulting in weak transactions. Copper prices in the SHFE market continued to move lower in the afternoon session, but copper discounts failed to fall further due to weakening consumption. Offers for high-quality copper were still quoted around discounts of negative RMB 200/mt. Fewer market participants entered into the market, and traders who were recent main contributors of market transactions also slowed their pace of purchasing due to cautious mood.