SMM Daily Review - 2011/9/8 Copper Market

SHANGHAI, Sept. 9 (SMM) –SHFE 1111 copper contract prices, the most active one, opened up RMB 630/mt at RMB 68,080/mt on Thursday. As LME copper prices continued to move lower after falling below USD 9,100/mt due to a slight rebound in the US dollar during the whole trading day, and since Chinese stock markets lost 2,500 points in the afternoon session, SHFE three-month copper contract prices met resistance to rebound, with the high-end only touching RMB 68,170/mt. Later, SHFE three-month copper contract prices moved downward further, and met pressures at the daily moving average, gradually narrowing the daily gains and dropping to RMB 67,710/mt in the afternoon session. Finally, SHFE 1111 copper contract prices closed at RMB 67,730/mt, up RMB 270/mt or 0.4%. Positions for SHFE 1111 copper contracts were down 9,100 lots, and trading volumes were down 43,696 lots. Markets were obviously cautious before the release of China's CPI data for August.  

In the spot market, SHFE failed to rebound, increasing both speculators and downstream producers' wait-and-see attitudes, but copper supply was sufficient. In this context, copper premiums narrowed compared with the previous trading day, reporting between discounts of negative RMB 50/mt and premiums of positive RMB 20/mt. Traded prices for standard-quality copper were between RMB 67,850-67,900/mt in the morning business, and RMB 67,950-68,000/mt for high-quality copper. Spot copper prices hovered around RMB 68,000/mt during the whole trading day, with low sentiment of keeping up with rising prices, and market transactions were weak. SHFE copper prices drifted lower in the afternoon session, but weak consumption couldn't easily improve. As a result, copper premiums failed to sustain, and only high-quality copper held premiums of positive RMB 0/mt. Traded prices fell slightly between RMB 67,850-68,000/mt.