SHANGHAI, Jan. 16 (SMM) –As LME copper prices surged overnight, SHFE 1203 copper contract prices opened up by RMB 830/mt at RMB 57,880/mt last Friday. SHFE three-month copper contract prices suffered position closings immediately after the opening, and basically fluctuated around the daily moving average of RMB 57,800/mt in the morning business, with a fluctuating band only within around RMB 300/mt and a low at RMB 57,480/mt, as Chinese stock markets closed down by 1.5%. In the afternoon business, as LME copper prices rallied to USD 8,000/mt, SHFE three-month copper contract prices climbed to RMB 58,220/mt after breaking through RMB 58,000/mt. Finally, SHFE 1203 copper contract prices closed at RMB 58,000/mt, up RMB 950/mt, or a gain of 1.67%. Positions for SHFE 1203 copper contracts were up 31,856 lots, and trading volumes were up 196,000 lots. SHFE 1204 copper prices would likely become the most actively-traded copper contracts January 16th. Technical factors would restrict SHFE copper price gains in the coming week.
In the spot market, SHFE copper prices fluctuated after a high open, but market activity for SHFE 1201 copper contracts was active owing to the last trading day, causing spot copper supply to decease significantly. In this context, spot copper offers were quoted between discounts of negative RMB 120-20/mt in the morning business. Daily traded prices for standard-quality copper were between RMB 56,850-57,100/mt, and RMB 56,950-57,250/mt for high-quality copper. Some speculators took the opportunity of discounts to make purchases, but cargo-holders held prices firm, helping copper discounts narrow and turn to premiums at the tail of trading. Downstream producers stood on the sidelines at the highs. Overall, market transactions rose after initially falling last Friday. Copper inventories monitored by the Shanghai Futures Exchange were up 151,94mt to 120,452 mt in the week ending January 13th, an indication of very limited market transactions as the SHFE current-month copper contracts were delivered and as the Chinese New Year holiday nears.