SMM Daily Review – 2012/2/9 Copper Market

SHANGHAI, Feb. 10 (SMM) –SHFE 1204 copper contract prices opened RMB 210/mt higher at RMB 60,980/mt Thursday. After the opening, a large number of short investors closed positions. In this context, SHFE three-month copper contract prices rose after fluctuating around RMB 61,000/mt, but met resistance after reaching a high of RMB 61,880/mt near the midday, returning below the daily moving average and continuing to fluctuate. Finally, SHFE 1204 copper contract prices closed at RMB 61,070/mt, up RMB 300/mt or 0.49%. Positions for SHFE 1204 copper contracts were down 19,400 lots, and trading volumes were down 76,856 lots. The shift of the most actively-traded copper contract was basically completed in the morning session. SHFE 1205 copper contract prices reported an intraday high at RMB 62,230/mt and finally ended at RMB 61,350/mt, up RMB 240/mt or 0.39%. Position for SHFE 1205 copper contracts were down 8,118 lots, while trading volumes were up 225,000 lots. Despite upward technical indicators, SHFE copper prices faced great upside pressures over the near term, and were waiting for opportunities to break out RMB 62,000/mt.

In the spot market, cargo-holders continued to be optimistic about future copper prices as SHFE copper prices continued to rebound despite more severe fluctuations, helping copper discounts narrow between negative RMB 250-80/mt in the morning business. Traded prices for standard-quality copper were between RMB 60,250-60,700/mt, and RMB 60,350-60,850/mt for high-quality copper. Speculative activity was active during the whole trading day, and downstream producers also became more willing to purchase, resulting in brisk market activity. In the afternoon session, SHFE copper prices fell slightly, but spot copper quotations held stable, causing copper discounts to remain virtually unchanged from the morning business levels. Traded prices in the afternoon business were also basically flat with the morning session levels, but supply decreased.