SHANGHAI, Feb. 2 (SMM) –SHFE 1204 copper contract prices, the most active one, opened down by RMB 380/mt at RMB 60,100/mt Wednesday. The PMI data released by both HSBC and China Federation of Logistics & Purchasing improved some compared with the previous reading, lowering the possibility of the introduction of loose monetary policy over the near term. Besides, LME copper prices retreated to USD 8,300/mt owing to the continuously strengthening US dollar index. SHFE three-month copper contract prices therefore moved lower after the opening and were unable to rally in the face of still increasing selling pressures. In the afternoon business, as LME copper prices lost the USD 8,300/mt point, and as Chinese stock markets closed down by more than 1%, SHFE three-month copper contract prices completely came under pressure at daily moving averages and touched an intraday low at RMB 59,420/mt. Finally, the most actively-traded copper contract prices closed at RMB 59,500/mt, down RMB 980/mt or 1.62%. Positions for the most actively-traded copper contracts were up 5,434 lots, while trading volumes were down 8,174 lots. SHFE copper prices would test support at the 10-day moving average.
In the spot market, as SHFE copper prices moved lower after a low open, copper discounts narrowed to between negative RMB 350-200/mt. Traded prices for standard-quality copper were between RMB 58,850-59,100/mt, and RMB 58,950-59,200/mt for high-quality copper. Cargo-holders held divergent views. Cargo-holders who were eager to generate cash chose to expand discounts, while others still had no intention to narrow discounts. Market activity was active in the morning session when copper discounts were relatively large, with downstream producers increasing buying at the lows. As a result, market transactions improved slightly compared with the previous two trading days. In the afternoon business, As SHFE copper prices continued to move lower, and as cargo-holders became unwilling to move goods at low price levels, spot copper discounts fell to between negative RMB 300-160/mt. Traded prices lost RMB 59,000/mt in the afternoon session, but transaction volumes were very limited.