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SMM Daily Review - 2011/9/9 Copper Market
Sep 13,2011 09:14CST
price review forecast
Source:SMM
SHFE 1111 copper contract prices, the most active one, opened slightly down RMB 70/mt at RMB 67,800/mt on Friday.

SHANGHAI, Sept. 13 (SMM) –SHFE 1111 copper contract prices, the most active one, opened slightly down RMB 70/mt at RMB 67,800/mt on Friday. After opening, short term long investors actively increased new positions, trying to push up copper prices before the release of China's economic results. However, SHFE three-month copper contract prices failed to break the resistance at RMB 68,000/mt, and reached a high at RMB 68,030/mt. Later, China announced the higher-than-expected CPI data for August, and Chinese stock markets slid from high levels, failing to hold 2,500 points. In response, SHFE three-month copper contract prices moved downward, and lowered further after breaking the daily moving average. At the tail of trading, due to increasing selling pressures, SHFE three-month copper contract prices were pressured further to an intraday low RMB 67,440/mt, but gained support near the 5-day moving average. Finally, SHFE 1111 copper contract prices closed at RMB 67,620/mt, down RMB 250/mt or a loss of 0.37%. Trading volumes for SHFE 1111 copper contracts were up 17,132 lots, and positions were up 2,802 lots. SHFE three-month copper contract prices rose and fell slower than LME copper prices, and would continue to fluctuate, with heavy pressures at the 30-day moving average.          

In the spot market, as China's CPI data remained higher in August, SHFE copper prices felt weak to move upward. In this context, cargo-holders were eager to move goods to generate cash and avoid risks before the Chinese Mid-Autumn Festival holiday, resulting in a significant increase in market supply. Cargo-holders were particularly eager to make transactions near the midday, helping copper discounts expand between negative RMB 100-0/mt. Traded prices for standard-quality copper were between RMB 67,880-67,980/mt, and RMB 67,950-68,050/mt for high-quality copper. Although some downstream producers increased stockpiling before the holiday, the situation of oversupply kept demand weak. SHFE copper prices fell further in the afternoon session, and copper supply remained ample, causing copper discounts to sustain. Traded prices already dropped between RMB 67,700-67,900/mt. Some traders and downstream producers were allowed to enjoy the holiday in advance, resulting in limited real transactions.     
 

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