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SMM Daily Review - 2011/8/11 Copper Market
Aug 12,2011 09:06CST
price review forecast
Source:SMM
As LME copper prices overnight closed USD 104/mt lower, SHFE 1110 copper contract prices, the most active one, opened down RMB 1,140/mt at RMB 65,790/mt on Thursday.

SHANGHAI, Aug. 12 (SMM) –As LME copper prices overnight closed USD 104/mt lower, SHFE 1110 copper contract prices, the most active one, opened down RMB 1,140/mt at RMB 65,790/mt on Thursday. Since LME copper prices returned USD 8,800/mt due to a drop in the US dollar index and the Shanghai Composite Index moved higher from lows, SHFE three-month copper contract prices were pushed up after opening lower, narrowing daily declines, but met resistance at RMB 67,000/mt, with a high at RMB 67,070/mt. Finally, SHFE 1110 copper contract prices closed the day at RMB 66,710/mt, down RMB 220/mt or 0.33%. Positions and trading volumes for SHFE 1110 copper contracts were up 7,154 lots and 88,242 lots, respectively, while positions for SHFE 1111 copper contracts were up 15,506 lots, a signal of the continuous shift of the most actively-traded copper contracts. Despite increasing incoming capitals, the longs and shorts mainly made intraday transactions. Pressured by the 5-day moving average, SHFE three-month copper contract prices were expected to fluctuate.

In the spot market, although SHFE copper prices moved higher after a low open, panic sentiment was still dominating the market. As a result, cargo-holders were eager to move goods for cash generation, and copper discounts increased all the way to negative RMB 250-100/mt. Trade prices for standard-quality copper were between RMB 66,700-66,800/mt, and RMB 66,800-66,900/mt for high-quality copper. Speculators took advantages of discounts for high-quality copper to make purchases before the delivery dates, while downstream producers having orders and capitals continued to make purchases at low prices. However, overall market sentiment remained cautious. SHFE copper prices experienced fluctuations in the afternoon session, and spot copper discounts reduced slightly. Traded prices were nearly flat with morning levels. As trader’s buying interest weakened, transactions tended to become sluggish. 


 

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