Metals News
SMM Daily Review – 2012/1/17 Copper Market
smm insight

SHANGHAI, Jan. 18 (SMM) –SHFE 1204 copper contract prices opened up by RMB 570/mt at RMB 58,580/mt Tuesday. SHFE three-month copper contract prices moved higher after a high open, as LME copper prices broke resistance at USD 8,200/mt owing to the plunging US dollar index. Combined with a surge of more than 4% in Chinese stock prices, SHFE three-month copper contract prices virtually fluctuated around RMB 60,000/mt in the afternoon session, with an intraday high touching RMB 60,090/mt. Finally, SHFE 1204 copper contract prices closed at RMB 59,930/mt, up RMB 1,920/mt, a gain of 3.31%. Positions for SHFE 1204 copper contracts were up 18,184 lots, and trading volumes were up 156,000 lots. Long investors were active building new positions during the whole trading day, causing SHFE copper prices to climb. However, technically, SHFE copper prices met upside resistance and were likely to test RMB 60,000/mt continuously for the foreseeable future.     

In the spot market, as SHFE copper prices surged by more than RMB 1,000/mt, copper discounts rose sharply to between negative RMB 580-400/mt in the morning business. Traded prices for standard-quality copper were between RMB 57,950-58,200/mt in the morning business, and RMB 58,000-58,400/mt for high-quality copper. Supply of hydro-copper decreased since cargo-holders refused to offer large discounts during the whole trading day, while supply of standard- and high-quality copper remained sufficient. Some speculators took an opportunity to enter the market, but downstream producers still lacked interest in buying, leading market activity to become weaker in the morning session. In the afternoon business, as SHFE copper prices rose towards RMB 60,000/mt, spot copper discounts expanded again to between negative RMB 800-600/mt, while market transactions stagnated. 

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