SHANGHAI, Jan. 5 (SMM) –
As LME copper prices surged overnight, SHFE 1203 copper contract prices, the most active one, opened up by RMB 1,410/mt at RMB 56,450/mt Wednesday. After the opening, SHFE three-month copper contract prices lacked upside momentum after long investors conducted profit-taking, and met resistance at RMB 56,680/mt. SHFE three-month copper contract prices continued to move lower as short investors entered the market and slid below the RMB 56,000/mt level after LME copper prices lost USD 7,700/mt. In the afternoon business, tracking declines in Chinese stock markets, SHFE three-month copper contract prices gathered falling momentum and declined to an intraday low of RMB 55,740/mt. Finally, SHFE 1203 copper contract prices ended at RMB 55,790/mt, up RMB 750/mt or 1.36%. Positions for SHFE 1203 copper contracts were up by 8,492 lots, while trading volumes were down to 400,000 lots. As selling pressures from short investors were growing, SHFE copper prices faced great pressures at RMB 56,000/mt, and were expected to test the 60-day moving average of RMB 55,800/mt over the near term.
In the spot market, although SHFE copper prices moved higher, copper discounts narrowed slightly to between negative RMB 330-180/mt in the morning business. Traded prices for standard-quality copper were between RMB 56,100-56,350/mt in the morning session, and RMB 56,150-56,500/mt for high-quality copper. Copper supply was sufficient during the whole trading day, with imported copper continuously dominating the market. Traders of domestic copper were unwilling to sell. Speculators with capitals made appropriate purchases, but downstream producers made very limited purchases due to no improvement in tight cash flows. Overall, market activity was light on the first trading day after the New Year holiday. In the afternoon session, as SHFE copper prices continued to move lower, spot copper discounts fell further to between negative RMB 200-100/mt, while traded prices already declined below the RMB 56,000/mt level. Copper consumption failed to improve in the afternoon business.
SHFE aluminum for three-month delivery climbed to an intraday high of RMB 16,180/mt in the morning, but slipped to and stayed at RMB 16,030/mt in the afternoon due to falling Chinese stocks prices and light spot aluminum demand. Positions of the contract decreased 2,570 lots to 19,830 lots. Spot aluminum traded mainly between RMB 16,000-16,040/mt in Shanghai, with discounts of RMB 0-40/mt over the SHFE current-month aluminum price. Spot aluminum trading was moderate in the beginning, but turned light after quotations were hiked.
SHFE lead prices moved down after opening higher at RMB 15,405/mt on Wednesday. Prices rose to touch RMB 15,490/mt due to increase in China’s stock markets but then fell down and found support at RMB 15,310/mt level. Later, prices moved around RMB 15,330/mt and finally closed at 15,310/mt. Trading volumes increased by 100 lots to 356 lots, and positions decreased by 146 lots to 1,118 lots.
In domestic spot markets, quotations for well-known brands such as Nanfang and Chihong Zn&Ge were between RMB 15,350-15,360/mt. Quotations for other brands including lead from Gejiu were around RMB 15,280/mt. In the afternoon, spot prices fluctuated down with SHFE lead prices, and branded lead were quoted at RMB 15,320/mt. Purchases increased as downstream buyers were bullish towards market outlook and due to a lack of purchases during the New Year’s holiday, but less transactions were done among traders. Trading market improved in general.
On Wednesday, SHFE three-month zinc contract prices opened slightly higher at RMB 14,945/mt, and then slid along with falling stock markets, with prices finally closing at RMB 14,775/mt, up RMB 25/mt, above the 5-day moving average. Trading volumes decreased by nearly 30,000 lots to 161,098 lots, and total position decreased by 3,492 lots to 206,568 lots.
In domestic spot markets, #0 zinc was traded between RMB 14,700-14,750/mt in the morning session. As SHFE zinc prices inched down later, spot discounts remained between negative RMB 150-170/mt, and traded prices fell to RMB 14,620-14,650/mt. #1 zinc was traded between RMB 14,550-14,600/mt. Transactions were still muted after the holiday.
Shanghai spot tin prices climbed a little bit on Wednesday, with mainstream Yunxi, Yunshan and Jinhai trading between RMB 159,000-160,000/mt and deals below RMB 159,000/mt rarely seen. The low selling interest of Jiangxi-based smelters had led to a further cut in lower-priced supply and some holders unwilling to move goods hiked quotations, leading to higher tin prices of the day. The traded volume was moderate and stock replenishment interest was low despite of the nearing Chinese New Year.
On Wednesday, Jinchuan Group raised refined nickel prices to RMB 131,000/mt, up RMB 2,000/mt. This was the second time that Jinchuan Group raised its ex-works prices for refined nickel since last Saturday. In the Shanghai nickel spot market, mainstream traded prices of nickel from Jinchuan Group were between RMB 130,500-131,000/mt and mainstream traded prices of nickel from Russia were between RMB 128,700-129,000/mt before Jinchuan Group’s price adjustment. After Jinchuan Group raised refined nickel prices, mainstream traded prices of nickel from Jinchuan Group were between RMB 131,000-131,500/mt and mainstream traded prices of nickel from Russia were between RMB 129,300-129,500/mt. As Jinchuan Group raised nickel prices consecutively, downstream buying interest was very low, with most deals concluded by traders, keeping overall trading activity quiet.