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SMM Daily Review - 2011/8/4 Copper Market
Aug 5,2011 08:56CST
smm insight
Source:SMM
As LME copper prices slumped overnight, SHFE 1110 copper contract prices, the most active one, opened down RMB 430/mt at RMB 71,630/mt on Thursday.

SHANGHAI, Aug. 5 (SMM) –As LME copper prices slumped overnight, SHFE 1110 copper contract prices, the most active one, opened down RMB 430/mt at RMB 71,630/mt on Thursday, with prices fluctuating weakly during the whole trading day given resistance at the daily moving average. Due to a rebounding US dollar index, the resistance at USD 9,600/mt for LME copper prices, as well as weak domestic stock markets, SHFE three-month copper contract prices fell to a low at RMB 71,200/mt, and kept fluctuating around RMB 71,550/mt after gaining support at the 30-day moving average. SHFE three-month copper contract prices followed LME copper prices to return above the daily moving average at the tail of trading, paring previous declines, as the US dollar index fell after initially increasing. Finally, the most actively-traded copper contract prices closed at RMB 71,610/mt, down RMB 450/mt or 0.62%. Positions for the most actively-traded copper contracts were down 2,696 lots, while trading volumes were up 23,974 lots. SHFE three-month copper contract prices lowered to test the 30-day moving average after losing the 20-day moving average twice, and were expected to fall further due to the downside technical index. 

In spot market, as SHFE copper prices moved lower after a low open and cargo-holders were reluctant to sell at lows, offers tended to change from discounts to premiums. In particular, offers for the leading "Guixi" brand held firm between discounts of negative RMB 0/mt and slight premiums. Market transactions reduced, and mainly came from participants for the purpose of hedge trading. Spot copper discounts were quoted between negative RMB 50-30/mt. Trade prices for standard-quality copper were between RMB 71,350-71,400/mt, and RMB 71,400-71,450/mt for high-quality copper. Trader’s buying interest was dampened due to a significant drop in copper discounts, while downstream producers continued to make purchases at lows, resulting in modest trading volumes. In the afternoon session, spot copper offers all returned to discounts between negative RMB 100-20/mt. Traded prices and trading sentiment were little changed from the morning session.    


 

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