SHANGHAI, Aug. 18 (SMM) –SHFE 1111 copper contract prices opened down RMB 320/mt at RMB 66,430/mt on Wednesday. As LME copper prices moved higher due to a falling US dollar index, SHFE three-month copper contract prices moved upward after the opening. The longs entered into the market, but due to weak domestic stock markets and the resistance at the 5-day moving average of RMB 66,750/mt, the shorts increased sell-off pressures at around RMB 67,000/mt. In this context, SHFE three-month copper contract prices met pressure at Tuesday's settlement prices RMB 66,750/mt before the midday, and widely fluctuated around the price mark. In the afternoon session, SHFE three-month copper contract prices jumped above RMB 67,000/mt after LME copper prices increased above USD 8,900/mt, reaching as high as RMB 67,130/mt. Due to withdrawal of speculative funds, the most actively-traded copper contract prices closed at RMB 66,800/mt, up RMB 50/mt or a gain of 0.07%. Positions and trading volumes for the most actively-traded copper contracts were up 7,692 lots and 29,606 lots, respectively, while positions for SHFE 1110 copper contracts were significantly down 15,558 lots. Investors made intraday operation since they were unsure about future copper prices. With growing risks, SHFE three-month copper contract prices were expected to fluctuate further.
In spot markets, spot copper offers couldn't follow wild changes in SHFE copper prices, with offers quoted at premiums of positive RMB 100-200/mt. Trade prices for standard-quality copper were between RMB 66,900-67,000/mt in the morning business, and RMB 67,000-67,150/mt for high-quality copper. Offers from cargo-holders were firm due to impossible hedge trading, while downstream producer's buying interest weakened further due to unstable SHFE copper prices and uncertainty in future prices, resulting in a significant drop in market transactions. SHFE copper prices were pushed up in the afternoon session, but copper supply was still limited, keeping high-quality copper offers firm at premiums of positive RMB 120-150/mt. Traded prices were little changed from the morning business, and market transactions remained weak.