SMM Daily Review - 2012/1/9 Base Metals Market-Shanghai Metals Market

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SMM Daily Review - 2012/1/9 Base Metals Market

SMM Insight 09:19:25AM Jan 11, 2012 Source:SMM

SHANGHAI, Jan. 10 (SMM) --

Copper

SHFE 1203 copper contract prices, the most active one, opened up slightly by RMB 330/mt at RMB 55,680/mt Tuesday. After the opening, SHFE three-month copper contract prices continued to slide owing to prevailing resistance, testing support at the 20-day moving average and touching a low of RMB 55,110/mt. Near the midday, China announced the country’s exports of unwrought copper and copper semis for December 2011 reached to a record monthly high, lifting SHFE three-month copper contract prices. In the afternoon session, as LME copper prices broke out USD 7,600/mt, and as Chinese stock markets surged by 3%, SHFE three-month copper contract prices rose rapidly to above RMB 56,000/mt, with an intraday high at RMB 56,130/mt. However, owing to bargain hunting by short investors at this price mark, SHFE three-month copper contract prices lacked upward momentum and narrowly fluctuated below it. At the tail of trading, short-term investors closed positions on a large scale, causing SHFE copper prices to give up earlier gains. Finally, SHFE 1203 copper contract prices closed at RMB 55,870/mt, up RMB 520/mt or 0.94%. Positions for SHFE 1203 copper contracts were down 8,678 lots, and trading volumes were down 38,890 lots. As long investors lacked interest in keeping up rising prices, SHFE copper prices were still facing resistance at RMB 56,000/mt. 

In the spot market, although SHFE copper prices moved lower after a high open, copper discounts expanded all the way since cargo-holders eagerly sought to move goods. Mainstream offers were reported between discounts of negative RMB 150/mt and premiums of positive RMB 20/mt in the morning business. Traded prices for standard-quality copper were between RMB 55,100-55,200/mt, and RMB 55,150-55,350/mt for high-quality copper. Buying interest from both speculators and downstream producers was limited, resulting in sluggish market activity. In the afternoon session, as SHFE copper prices rose, spot copper offers were quoted at discounts across the board, between negative RMB 220-80/mt. However, traded prices increased to between RMB 55,400-55,700/mt in the afternoon business, which caused market activity to become more quiescent.

Aluminum

The SHFE four-month aluminum contract became the most active one at the tail of trading on Tuesday, which gapped higher at RMB 16,030/mt and closed RMB 185/mt or 1.16% higher at RMB 16,095/mt. Positions of the contract gained 222 lots at 53,885 lots. Despite of depressive fundamentals, both traded volume and price of the contract climbed supported by surging Chinese stocks prices. However, it needs to show its ability to stay at the mark in the near term.

Traded prices of spot aluminum in Shanghai were between RMB 15,970-16,000/mt on Tuesday, with discounts of RMB 20-50/mt over the SHFE current-month aluminum price. In the morning, the most active SHFE aluminum contract rebounded to above RMB 16,000/mt, easing the bearish sentiment in the spot market. While the downstream buying interest was still low, cargo holders were less willing to move goods at lower prices, narrowing discounts over the SHFE current-month aluminum price. Limited deals were done. In the afternoon, the most active SHFE aluminum contract expanded gains supported by the surging Shanghai Composite Index, which led to even lower selling interest. Downstream buyers, however, had been cold to such changes. Only sparse quotations between RMB 15,960-16,000/mt were seen in the afternoon and deals were hardly concluded.

Lead

SHFE 1203 lead contract prices fluctuated narrowly between RMB 15,120-15,170/mt after opening at RMB 15,200/mt on Tuesday. In the afternoon, influenced by the hike in Chinese domestic stocks and LME lead prices, SHFE lead prices rose from RMB 15,150/mt to RMB 15,330/mt, but met resistance at the 30-day moving average. Prices finally closed at RMB 15,275/mt, up RMB 95/mt. Trading volumes decreased by 200 lots to 364 lots, and positions increased by 170 lots to 1,452 lots.

In domestic spot markets, traded prices for well-known brands such as Nanfang, Chihong Zn & Ge, were between RMB 15,220-15,230/mt, with premiums of RMB 70/mt over SHFE 1203 lead contract prices. Other brands including Tianma were traded at RMB 15,150/mt. In the afternoon, SHFE lead prices rose significantly, but increases in spot prices were limited. Transactions were modest and buyers were not actively building stocks ahead of holiday.

Zinc

On Tuesday, SHFE three-month zinc contract prices opened at RMB 14,790/mt, moving between RMB 14,750-14,800/mt in the morning session. As LME zinc prices surged due to weakening US dollar index, SHFE three-month zinc contract prices touched but met resistance at RMB 15,000/mt level, with prices finally closing at RMB 14,920/mt, up RMB 225/mt or 1.53%, above the 5-day moving average. Trading volumes decreased by 50,000 lots to 175,732 lots, and total position decreased by 10,900 lots to 202,486 lots.

In domestic spot markets, SHFE three-month zinc contract prices moved between RMB 14,750-14,800/mt, with spot discounts between RMB 150-180/mt. #0 zinc was traded around RMB 14,550/mt, and #1 zinc was traded around RMB 14,500/mt. Both cargo holders and downstream buyers were cautious. As SHFE zinc prices rose, spot discounts expanded to RMB 230-250/mt, but the market was unwilling to accept higher prices, keeping transactions quiet.

Tin

Tight supply as a result of optimism among smelters and goods holders and stock replenishment demand ahead of the Chinese New Year have been continually driving up tin prices during recent days. Spot tin trading weakened after tin prices climbed above RMB 166,000/mt on Tuesday, but slightly recovered following a rebound in LME tin in the afternoon. Mainstream Kaiyuan, Jinhai and Yunshan branded tin, together with Yunheng and Yunxi branded tin scheduled to arrive next week, traded between RMB 165,000-168,000/mt. The overall traded volume was moderate. Transportation has become a key determiner of recent tin prices as hundreds of millions of people head home for family reunion. Whether tin prices can surge further ahead of the Chinese New Year may largely be decided by the attitudes of sellers and buyers.

Nickel

LME nickel for delivery in three months initially declined but later advanced during Asian trading hours on Tuesday. LME nickel prices fell to hit USD 18,900/mt after opening, but were boosted to reach USD 19,000/mt and stand above 5-day moving average due to second consecutive day gain in China’s stock market and increase in LME copper prices. Close attention should be paid to November industrial output data from France and result of meeting between Germany and France.

In the Shanghai nickel spot market, mainstream traded prices of nickel from Jinchuan Group were between RMB 132,200-132,500/mt, and mainstream traded prices of nickel from Russia were between RMB 130-131,500/mt during the morning trading hours. Inspired by LME nickel price hike, mainstream traded prices of nickel from Jinchuan Group advanced to RMB 132,500-133,000/mt, and mainstream traded prices of nickel from Russia were between RMB 131,500-132,000/mt during the afternoon trading hours. Pre-holiday stock replenishment, coupled with limited supply of nickel from Russia, contributed to relatively brisk trading sentiment in spot market.
 

Key Words:  daily review; 

SMM Daily Review - 2012/1/9 Base Metals Market

SMM Insight 09:19:25AM Jan 11, 2012 Source:SMM

SHANGHAI, Jan. 10 (SMM) --

Copper

SHFE 1203 copper contract prices, the most active one, opened up slightly by RMB 330/mt at RMB 55,680/mt Tuesday. After the opening, SHFE three-month copper contract prices continued to slide owing to prevailing resistance, testing support at the 20-day moving average and touching a low of RMB 55,110/mt. Near the midday, China announced the country’s exports of unwrought copper and copper semis for December 2011 reached to a record monthly high, lifting SHFE three-month copper contract prices. In the afternoon session, as LME copper prices broke out USD 7,600/mt, and as Chinese stock markets surged by 3%, SHFE three-month copper contract prices rose rapidly to above RMB 56,000/mt, with an intraday high at RMB 56,130/mt. However, owing to bargain hunting by short investors at this price mark, SHFE three-month copper contract prices lacked upward momentum and narrowly fluctuated below it. At the tail of trading, short-term investors closed positions on a large scale, causing SHFE copper prices to give up earlier gains. Finally, SHFE 1203 copper contract prices closed at RMB 55,870/mt, up RMB 520/mt or 0.94%. Positions for SHFE 1203 copper contracts were down 8,678 lots, and trading volumes were down 38,890 lots. As long investors lacked interest in keeping up rising prices, SHFE copper prices were still facing resistance at RMB 56,000/mt. 

In the spot market, although SHFE copper prices moved lower after a high open, copper discounts expanded all the way since cargo-holders eagerly sought to move goods. Mainstream offers were reported between discounts of negative RMB 150/mt and premiums of positive RMB 20/mt in the morning business. Traded prices for standard-quality copper were between RMB 55,100-55,200/mt, and RMB 55,150-55,350/mt for high-quality copper. Buying interest from both speculators and downstream producers was limited, resulting in sluggish market activity. In the afternoon session, as SHFE copper prices rose, spot copper offers were quoted at discounts across the board, between negative RMB 220-80/mt. However, traded prices increased to between RMB 55,400-55,700/mt in the afternoon business, which caused market activity to become more quiescent.

Aluminum

The SHFE four-month aluminum contract became the most active one at the tail of trading on Tuesday, which gapped higher at RMB 16,030/mt and closed RMB 185/mt or 1.16% higher at RMB 16,095/mt. Positions of the contract gained 222 lots at 53,885 lots. Despite of depressive fundamentals, both traded volume and price of the contract climbed supported by surging Chinese stocks prices. However, it needs to show its ability to stay at the mark in the near term.

Traded prices of spot aluminum in Shanghai were between RMB 15,970-16,000/mt on Tuesday, with discounts of RMB 20-50/mt over the SHFE current-month aluminum price. In the morning, the most active SHFE aluminum contract rebounded to above RMB 16,000/mt, easing the bearish sentiment in the spot market. While the downstream buying interest was still low, cargo holders were less willing to move goods at lower prices, narrowing discounts over the SHFE current-month aluminum price. Limited deals were done. In the afternoon, the most active SHFE aluminum contract expanded gains supported by the surging Shanghai Composite Index, which led to even lower selling interest. Downstream buyers, however, had been cold to such changes. Only sparse quotations between RMB 15,960-16,000/mt were seen in the afternoon and deals were hardly concluded.

Lead

SHFE 1203 lead contract prices fluctuated narrowly between RMB 15,120-15,170/mt after opening at RMB 15,200/mt on Tuesday. In the afternoon, influenced by the hike in Chinese domestic stocks and LME lead prices, SHFE lead prices rose from RMB 15,150/mt to RMB 15,330/mt, but met resistance at the 30-day moving average. Prices finally closed at RMB 15,275/mt, up RMB 95/mt. Trading volumes decreased by 200 lots to 364 lots, and positions increased by 170 lots to 1,452 lots.

In domestic spot markets, traded prices for well-known brands such as Nanfang, Chihong Zn & Ge, were between RMB 15,220-15,230/mt, with premiums of RMB 70/mt over SHFE 1203 lead contract prices. Other brands including Tianma were traded at RMB 15,150/mt. In the afternoon, SHFE lead prices rose significantly, but increases in spot prices were limited. Transactions were modest and buyers were not actively building stocks ahead of holiday.

Zinc

On Tuesday, SHFE three-month zinc contract prices opened at RMB 14,790/mt, moving between RMB 14,750-14,800/mt in the morning session. As LME zinc prices surged due to weakening US dollar index, SHFE three-month zinc contract prices touched but met resistance at RMB 15,000/mt level, with prices finally closing at RMB 14,920/mt, up RMB 225/mt or 1.53%, above the 5-day moving average. Trading volumes decreased by 50,000 lots to 175,732 lots, and total position decreased by 10,900 lots to 202,486 lots.

In domestic spot markets, SHFE three-month zinc contract prices moved between RMB 14,750-14,800/mt, with spot discounts between RMB 150-180/mt. #0 zinc was traded around RMB 14,550/mt, and #1 zinc was traded around RMB 14,500/mt. Both cargo holders and downstream buyers were cautious. As SHFE zinc prices rose, spot discounts expanded to RMB 230-250/mt, but the market was unwilling to accept higher prices, keeping transactions quiet.

Tin

Tight supply as a result of optimism among smelters and goods holders and stock replenishment demand ahead of the Chinese New Year have been continually driving up tin prices during recent days. Spot tin trading weakened after tin prices climbed above RMB 166,000/mt on Tuesday, but slightly recovered following a rebound in LME tin in the afternoon. Mainstream Kaiyuan, Jinhai and Yunshan branded tin, together with Yunheng and Yunxi branded tin scheduled to arrive next week, traded between RMB 165,000-168,000/mt. The overall traded volume was moderate. Transportation has become a key determiner of recent tin prices as hundreds of millions of people head home for family reunion. Whether tin prices can surge further ahead of the Chinese New Year may largely be decided by the attitudes of sellers and buyers.

Nickel

LME nickel for delivery in three months initially declined but later advanced during Asian trading hours on Tuesday. LME nickel prices fell to hit USD 18,900/mt after opening, but were boosted to reach USD 19,000/mt and stand above 5-day moving average due to second consecutive day gain in China’s stock market and increase in LME copper prices. Close attention should be paid to November industrial output data from France and result of meeting between Germany and France.

In the Shanghai nickel spot market, mainstream traded prices of nickel from Jinchuan Group were between RMB 132,200-132,500/mt, and mainstream traded prices of nickel from Russia were between RMB 130-131,500/mt during the morning trading hours. Inspired by LME nickel price hike, mainstream traded prices of nickel from Jinchuan Group advanced to RMB 132,500-133,000/mt, and mainstream traded prices of nickel from Russia were between RMB 131,500-132,000/mt during the afternoon trading hours. Pre-holiday stock replenishment, coupled with limited supply of nickel from Russia, contributed to relatively brisk trading sentiment in spot market.
 

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