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SMM Daily Review - 2012/1/6 Base Metals Market
Jan 9,2012 09:24CST
smm insight
SHFE 1203 copper contract prices, the most active one, opened down slightly by RMB 50/mt at RMB 55,780/mt Friday.

SHANGHAI, Jan. 9 (SMM) --


SHFE 1203 copper contract prices, the most active one, opened down slightly by RMB 50/mt at RMB 55,780/mt Friday. Tracking LME copper price movements, SHFE three-month copper contract prices fell rapidly after initially increasing in the morning business, and basically fluctuated around RMB 55,800/mt in the afternoon session. Finally, SHFE 1203 copper contract prices settled at RMB 55,900/mt, up RMB 70/mt, or a gain of 0.13%. Positions for SHFE 1203 copper contracts were down 4,596 lots, while trading volumes were up 390 lots. With growing pressures at the 60-day moving average but good support at the low-end, SHFE three-month copper contract prices would continue to fluctuate in the RMB 55,000 -56,000/mt range over the near term.  

In the spot market, as SHFE copper prices fell after initially increasing, and as the inverted price relationship between SHFE 1201 and 1202 copper contracts eased some, cargo-holders held prices firm and helped copper offers quote between discounts of negative RMB120/mt and premiums of positive RMB 20/mt in the morning session, despite sufficient copper supply. Traded prices for standard-quality copper were between RMB 55,750-55,900/mt, and RMB 55,850-56,050/mt for high-quality copper. Some speculators made purchases owing to some profit margins, and downstream producers opted to replenish some stocks before the weekends, helping improve overall market transactions. In the afternoon session, SHFE copper prices kept fluctuating, but spot copper consumption became weak, causing spot copper offers to slide to discounts of negative RMB 150-20/mt, and the highest traded price was lower than that in the morning business. Copper inventories monitored by the Shanghai Futures Exchange increased by 12,039 mt to 105,258 mt in the week ending January 6th, becoming one of the reasons that resulted in sluggish copper prices.


The most active SHFE three-month aluminum contract opened slight lower at RMB 15,915/mt and closed down slightly by RMB 10/mt or 0.06% last Friday. Total transactions for the contract dropped to less than 7,000 lots and positions decreased 1,136 lots to 58,566 lots. SHFE aluminum stocks climbed rapidly following the New Year’s Day holiday from 13,568 mt to 221,624 mt, putting pressure on the metal.

Traded prices of spot aluminum in Shanghai were between RMB 15,960-15,990/mt last Friday, with discounts of RMB 0-20/mt over the SHFE current-month aluminum price. In the morning, the SHFE current-month aluminum price fell below the RMB 16,000/mt mark. Plus decreasing demand caused by production cuts for Chinese New Year holiday at aluminum enterprises in East China, goods holders were actively moving goods but some became reluctant to sell after prices fell below RMB 16,000/mt. Spot discounts in Shanghai did not expand but limited deals were made. The spot market was extremely quiet in the afternoon as consumption was too weak. Spot quotations were between RMB 15,950-15,970/mt, in line with the SHFE current-month aluminum contract.


SHFE lead prices opened slightly lower at RMB 15,225/mt and finally closed at RMB 15,275/mt on Friday. Trading volumes increased by 206 lots to 400 lots, and positions decreased by 2 lots to 1,100 lots.

In domestic spot markets, transactions were not as active as previous days. Downstream buyers only purchased on as-needed basis. Quotations for well-known brands such as Nanfang, Shuikoushan and Yubei were between RMB 15,230-15,250/mt. Quotations for other brands including Hexing were at RMB 15,180/mt. Buyers were cautiously buying goods ahead of weekend.


Last Friday, SHFE three-month zinc contract prices opened lower at RMB 14,750/mt, and dipped to RMB 14,605/mt dragged down by the Shanghai Composite Index, with prices moving between RMB 14,600-14,700/mt during the day. At the end of trading, SHFE three-month zinc contract prices gained back some losses to close at RMB 14,730/mt, down RMB 120/mt or 0.81%. Trading volumes increased by 120,000 lots to 285,768 lots, and total position increased by 24,562 lots to 225,838 lots.

In domestic spot markets, #0 zinc was traded between RMB 14,500-14,550/mt, with discounts between negative RMB 120-130/mt against SHFE three-month zinc contract prices. Imported zinc prices were still RMB 170-200/mt below, and #1 zinc was traded between RMB 14,450-14,500/mt. Transactions improved.


Spot tin prices rose further to RMB 162,000-163,000/mt last Friday in Shanghai and tremendous quotations at RMB 163,500/mt were also heard. Tight supply and higher quotations were major drivers during the day. Deals concluded below RMB 162,000/mt were seen in the morning. However, after ex-works prices of Yunxi branded tin were lifted to RMB 162,000/mt, prices of other tin brands quickly climbed on tight supply, hitting the highest RMB 163,500/mt of the day. Mainstream spot tin brands were Yunxi, Yunxiang and Kaiyuan. Tin futures traded during the day were mainly of the Jinhai brand. Stock replenishment demand also helped push up tin prices of the day. The overall traded volume was moderate.


LME advanced after opening during Last Friday’s Asian trading hours, but was weighed down to slip further by a new low of Shanghai Composite Index.

In the Shanghai nickel spot market, mainstream offers of nickel from Jinchuan Group were at RMB 131,500/mt, and mainstream offers of nickel from Russia were at RMB 129,500/mt during the morning trading hours. Boosted by stock replenishment from traders, mainstream traded prices of nickel from Jinchuan Group were in the RMB 131,500-131,700/mt range, and mainstream traded prices of nickel from Russia were in the RMB 129,500-129,800/mt range during the afternoon trading hours. Although LME nickel prices declined steadily, domestic spot nickel prices were still firm and transactions were relatively brisk. The firm prices of brisk transactions of spot nickel were mainly due to pre-holiday stock replenishment by traders.


daily review; Jan. 6;

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