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SMM Daily Review - 2011/9/15 Copper Market
Sep 16,2011 09:03CST
price review forecast
Source:SMM
SHFE 1111 copper contract prices opened down RMB 240/mt at RMB 65,340/mt Thursday. In the spot market, offers were mostly reported between discounts RMB 200-100/mt in the morning business.

SHANGHAI, Sept. 16 (SMM) –SHFE 1111 copper contract prices, the most active one, opened down RMB 240/mt at RMB 65,340/mt on Thursday. In the morning business, as LME copper prices met resistance several times when trying to reach USD 8,700/mt, SHFE three-month copper contract prices suffered increasingly higher selling pressures and fell to a low of RMB 64,700/mt. However, SHFE three-month copper contract prices climbed to RMB 65,590/mt after the Shanghai Composite Index rallied to test 2,500 points. In the afternoon session, since the Shanghai Composite Index failed to reach 2,500 points, SHFE three-month copper contract prices lost support, and slid below the daily moving average. SHFE 1111 copper contract prices finished the day at RMB 65,080/mt, down RMB 500/mt or 0.76%. Positions for SHFE 1111 copper contracts were up 302 lots and trading volumes were down 39,182 lots, while positions and trading volumes for SHFE 1112 copper contracts were up 9,366 lots and 40,518 lots, respectively. The shift of the most actively-traded copper contracts was expected to be completed on Friday. Growth in short investors’ strength was still obvious. Recently, SHFE three-month copper contract prices kept fluctuating weakly due to impacts of macro environment, trying to search support near RMB 65,000/mt. SHFE three-month copper contract prices could find no support at any moving averages for the low-end, suggesting the market was oversold.        

In the spot market, SHFE copper prices fluctuated narrowly after the opening. As Thursday was the last trading day before the delivery date, the price gap between SHFE 1109 and 1110 copper contracts remained more than RMB 300/mt, cargo-holders were eager to sell for cash generation, with offers mostly reported between discounts of negative RMB 200-100/mt.  Near the midday, as the price gap between SHFE 1109 and 1110 copper contracts gradually reduced to RMB 0/mt, cargo-holders’ willingness in moving goods weakened, helping copper discounts fall to negative RMB 100-0/mt. Traded prices for standard-quality copper were between RMB 65,250-65,400/mt in the morning business, and RMB 65,350-65,550/mt for high-quality copper. Spot copper supply was over ample during the whole trading day. Despite mixed price offers, buyers increased purchases at the lows, improving market transactions. In the afternoon session, SHFE copper prices fluctuated weakly and had signs of moving lower. In this context, cargo-holders tried to hold slight premiums of positive RMB 20/mt for high-quality copper, and were unwilling to offer standard-quality copper with discounts, since they were waiting for better transactions after the delivery date. Traded prices were firm between RMB 65,300-65,400/mt. Due to sufficient market supply, premiums failed to sustain.      


 

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