SHANGHAI, Feb. 8 (SMM) –As LME copper prices tended to become weak overnight, SHFE 1204 copper contract prices, the most active one, opened RMB 160/mt lower at RMB 60,490/mt Tuesday. SHFE three-month copper contract prices fluctuated briefly after the opening and then fell due to resistance, with an intraday high reaching RMB 60,760/mt. As LME copper prices lowered to test support at the 10-day moving average, and as Chinese stock markets slid by 2%, SHFE three-month copper contract prices retreated more quickly and fell below the RMB 60,000/mt point in the afternoon session, but the falling momentum eased after prices were down to near RMB 59,850/mt. At the tail of trading, SHFE three-month copper contract prices pared some of the losses after gaining buying support at the lows, returning to levels near RMB 60,000/mt. Finally, SHFE 1204 copper contract prices closed at RMB 60,030/mt, down RMB 620/mt or 1.02%. Positions for SHFE 1204 copper contracts were down 4,528 lots, and trading volumes were down 20,386 lots. As long and short investors struggled at RMB 60,000/mt, support at the 10-day moving average of RMB 59,900/mt needs to be confirmed.
In the spot market, SHFE copper prices slid all the way, but cargo-holders still chose to hold back goods due to prevailing losses in hedge trading, helping copper discounts fall slightly to between negative RMB 350-150/mt in the morning business. Traded prices for standard-quality copper were between RMB 59,250-59,400/mt, and RMB 59,300-59,650/mt for high-quality copper. Traders opted to stay out of the market during the whole trading day owing to falling copper discounts, while downstream producers stuck to the sidelines since copper prices haven’t fully made corrections, bringing market activity into stalemate. In the afternoon session, SHFE copper prices continued to slide, but cargo-holders showed strong reluctance to move goods at the lows, causing spot copper supply to decrease continuously. Cargo-holders of high-quality copper held offers firm, greatly spreading the price gap with standard-quality copper. Due to weak consumption, spot copper discounts failed to narrow sharply in the afternoon session, with mainstream offers reported between negative RMB 300-150/mt. Traded prices declined to between RMB 59,000-59,250/mt in the afternoon session, but deadlock in market activity sustained.