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SMM Daily Review - 2011/12/1 Copper Market
Dec 2,2011 08:57CST
smm insight
SHFE 1202 copper contract prices opened at RMB 58,180/mt Thursday. Copper premiums fell significantly and imported standard-quality copper was traded at discounts in the morning business.

SHANGHAI, Dec. 2 (SMM) –As LME copper prices surged significantly overnight, SHFE 1202 copper contract prices, the most active one, opened at their daily upper trade limit of RMB 58,180/mt on Thursday. After the opening, as both long and short investors closed positions on a large-scale, SHFE three-month copper contract prices fell below the daily upper trade limit and fluctuated narrowly around the RMB 58,000/mt level. Finally, SHFE 1202 copper contract prices closed at RMB 57,960/mt, up RMB 3,070/mt or a gain of 5.59%. Positions for SHFE 1202 copper contracts were down 79,838 lots, and trading volumes were down 128,000 lots. As technical indicators continued to point upward, SHFE copper prices were expected to rebound further in the near term.

In the spot market, as SHFE copper prices surged by 5.5%, copper premiums fell significantly and imported standard-quality copper was traded at discounts, with mainstream offers quoted between discounts of negative RMB 50/mt and premiums of positive RMB 150/mt in the morning business. Traded prices for standard-quality copper were between RMB 58,250-58,400/mt, and RMB 58,400-58,550/mt for high-quality copper. Downstream producers couldn’t predict directions of future copper prices following quick and excessive price increases, opting to stand on the sidelines, while some speculators chose to enter the market owing to a lure of low copper premiums. High-quality copper was especially welcomed, but transactions for low-quality copper were poor. In the afternoon business, as SHFE copper prices stabilized, spot copper premiums rose slightly to between positive RMB 50-250/mt, and traded prices were virtually unchanged from the morning business levels, with both speculators and downstream producers sticking to the sidelines. 

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