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SMM Daily Review - 2011/8/16 Copper Market
Aug 17,2011 08:58CST
price review forecast
Source:SMM
Due to a stable US dollar, LME copper prices fell below USD 8,900/mt after profit-taking, and SHFE three-month copper contract prices fell rapidly after opening higher.

SHANGHAI, Aug. 17 (SMM) –SHFE 1110 copper contract prices, opened slightly up RMB 20/mt at RMB 67,300/mt on Tuesday. Due to a stable US dollar, LME copper prices fell below USD 8,900/mt after profit-taking, and SHFE three-month copper contract prices fell rapidly after opening higher. Later, domestic stock markets moved lower, weighing on SHFE three-month copper contract prices, which dropped below the 5-day moving average before the midday due to a sell-off by the shorts. SHFE 1110 copper contract prices were on a falling track during the whole trading day, with an intraday low at RMB 66,360/mt and finally ending at RMB 66,510/mt, down RMB 830/mt or 1.23%. Positions and trading volumes for SHFE 1110 copper contracts were down 3,828 lots and 26,720 lots, respectively, while positions and trading volumes for SHFE 1111 copper contracts were up 19,570 lots and 66,484 lots, respectively, suggesting the completion of the shift of the most actively-traded copper contracts. SHFE three-month copper contract prices were expected to test the 5-day moving average.     

In spot markets, as SHFE copper prices fell back and prices below RMB 67,000/mt attracted downstream producers to make purchases, cargo-holders were reluctant to move goods and push up initial premiums to positive RMB 60-120/mt. Later, since SHFE copper prices continued to fall, copper premiums expanded further to positive RMB 80-200/mt near the midday. Trade prices for standard-quality copper were between RMB 66,850-66,950/mt in the morning business, and RMB 66,950-67,200/mt for high-quality copper. Copper premiums for high-quality copper expanded rapidly due to welcomed consumption, but standard-quality imported copper failed to increase premiums, resulting in bigger price gap between the two. Market transactions were relatively brisk as downstream producers actively participated in the market. Copper prices on the SHFE market continued to fall, and higher copper premiums damped trader’s buying interest. As a result, market transactions were not as brisk as the morning session. Spot copper premiums failed to increase significantly, but were reported between positive RMB 120-220/mt. Traded prices dropped between RMB 66,750-67,000/mt, and markets showed wait-and-see sentiment.  

 

Cu daily review

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