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SMM Daily Review - 2011/8/31 Copper Market
Sep 1,2011 09:07CST
price review forecast
Source:SMM
SHFE 1111 copper contract prices, the most active one, opened slightly up RMB 70/mt at RMB 68,220/mt on Wednesday, with the prices moving like the shape of “V”.

SHANGHAI, Sept. 1 (SMM) –SHFE 1111 copper contract prices, the most active one, opened slightly up RMB 70/mt at RMB 68,220/mt on Wednesday, with the prices moving like the shape of “V”. SHFE three-month copper contract prices followed LME copper prices to move downward after the opening, but gained support near RMB 68,000/mt, with an intraday low of RMB 67,960/mt. In the afternoon session, as LME copper prices continued to climb after breaking the morning resistance of USD 9,150/mt due to a drop in the US dollar index, and since Chinese stock markets turned into increasing from falling, SHFE three-month copper contract prices kept advancing. Finally, SHFE 1111 copper contract prices closed at the intraday high of RMB 68,360/mt, up RMB 210/mt or a gain of 0.31%. Positions for SHFE 1111 copper contracts were down 5,002 lots, while trading volumes were up 48,894 lots. The longs reported profit-taking at highs, and increases of sell-off pressures of the shorts were limited. As markets were waiting for China’s PMI data to be announced the following day and the US non-farm payrolls to be released Friday, market players would make operations till a clearer price trend, with cautious sentiment persistent in the market.   

In spot market, SHFE copper prices fell after a high open, but circulating copper sources in the market fell slightly due to cash flow pressures on the last trading day of August. Traders with no cash flow problems quoted price offers firm, helping copper discounts narrow. As a result, copper offers were initially quoted between discounts of negative RMB 100-0/mt, but later weak consumption dragged spot copper offers, which caused copper discounts to expand slightly to negative RMB 120-20/mt. Trade prices for standard-quality copper were between RMB 68,050-68,100/mt in the morning business, and RMB 68,100-68,200/mt for high-quality copper. Imported copper accounted for most of the market circulation during the whole trading day. Downstream producers made fewer purchases due to cash flow problems, which led market transactions to fall significantly, highlighting the characteristic of the month’s end. SHFE copper prices rebounded in the afternoon session, spot discounts expanded further. Discounts for standard-quality copper were negative RMB 200-150/mt, and negative RMB 150-100/mt for high-quality copper. The highest traded prices rose already to RMB 68,300/mt.      
 

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