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SMM Daily Review – 2012/3/13 Base Metals Market
Mar 14,2012 10:36CST
smm insight
SHFE 1206 copper contract prices closed RMB 480/mt higher at RMB 61,040/mt Tuesday. The most active SHFE aluminum contract for May delivery gained RMB 25/mt closing at RMB 16,200/mt.

SHANGHAI, Mar. 14 (SMM) –

SHFE 1206 copper contract prices, the most active one, opened RMB 120/mt higher at RMB 60,680/mt Tuesday. SHFE copper prices continued to fluctuate around the daily moving average after the opening, but rose rapidly and challenged resistance at the RMB 61,000/mt mark near the midday, as a sliding US dollar helped LME copper prices break out USD 8,500/mt. In the afternoon session, Chinese stock markets increased, supporting SHFE copper prices to move firmly around RMB 61,000/mt and touch a high of RMB 61,120/mt. Finally, SHFE 1206 copper contract prices closed at RMB 61,040/mt, up RMB 480/mt or 0.79%. Trading volumes for SHFE 1206 copper contract were down 24,418 lots, while positions were up 1,568 lots. SHFE copper prices already stood above all moving averages, with increasing support at RMB 60,500/mt, and would test RMB 61,000/mt Wednesday.

In spot markets, SHFE copper prices rebounded slightly and rose abruptly near the midday, but cargo-holders continued to quote prices firm. Mainstream copper offers were reported between discounts of negative RMB 50/mt and premiums of positive RMB 30/mt in the morning business. Traded prices for standard-quality copper were between RMB 59,800-59,950/mt, and RMB 59,850-60,050/mt for high-quality copper. Cargo-holders of high-quality copper refused to move goods at discounts, while the supply of low-quality hydro-copper was limited. The price gap between standard- and high-quality copper was relatively small, so market activity for high-quality copper was active. Downstream producers stuck to the sidelines above RMB 60,000/mt, but bought aggressively at the lows in the morning session. In the afternoon session, SHFE copper prices fluctuated at high prices, but spot copper offers were nearly unchanged from the morning session levels, while the low-end traded price rose to RMB 59,950/mt. Actual market transactions remained limited in the afternoon business.  


The most active SHFE aluminum contract for May delivery gained a slight RMB 25/mt or 0.15% closing at RMB 16,200/mt on Tuesday, after the Greek debt swap deal was struck while cautiousness stayed before the Fed interest rate meeting. SMM expects the contract to wander near RMB 16,200/mt in the near term as fundamentals stay weak.

Spot aluminum traded between RMB 15,930-15,960/mt, at discounts of RMB 10-40/mt over the SHFE current-month aluminum price in Shanghai. Low-iron aluminum was traded between RMB 16,030-16,050/mt. Trading only slightly improved after the Greek debt swap deal as weak demand continues to weigh on the light metal.

On Tuesday, SHFE lead prices opened slightly higher at RMB 15,980/mt due to the rising LME lead prices and gained support at RMB 16,000/mt in the morning to move above the level. In the afternoon, SHFE lead prices moved between RMB 16,030-16,060/mt and finally closed at RMB 16,055/mt, up RMB 115/mt. Traded volumes decreased by 258 lots to 138 lots and positions were up 6 lots to 1,392 lots.

In domestic spot markets, quotations were still rarely reported, brands such as Chihong Zn & Ge and Yubei were quoted between RMB 15,910-15,950/mt, with discounts over SHFE 1205 lead contract price at RMB 60/mt. Quotations for other brands were sparse. Inquiries were frequent but only limited transactions were done. In the afternoon, spot prices remained unchanged and market was even quieter.

On Tuesday, SHFE three-month zinc contract prices opened at RMB 15,960/mt, and met pressure at RMB 16,000/mt. Boosted by the Shanghai Composite Index, SHFE three-month zinc contract prices broke through RMB 16,000/mt and finally closed at RMB 16,050/mt, up RMB 185/mt or 1.17%. Trading volumes increased by nearly 30,000 lots to 170,834 lots, and total position increased by 9,466 lots to 167,740 lots.

In domestic markets, discounts of #0 zinc were RMB 330-340/mt, with traded prices around RMB 15,600/mt. spot discounts expanded to RMB 350-360/mt in the midday as SHFE zinc prices rose to RMB 16,000/mt, with traded prices up to RMB 15,650/mt. #1 zinc was traded between RMB 15,550-15,600/mt. Smelters were actively moving goods, keeping goods supply available in the market sufficient.

Spot tin prices stayed between RMB 170,500-172,000/mt on Tuesday in Shanghai. Trading was still light while supply at low-end prices increased. Nanshan, Feidie, Yunxiang (云象) and Yunxiang (云祥) concluded transactions mainly between RMB 170,500-171,000/mt while Yunxi, Yunheng and Yunshan struck deals between RMB 171,500-172,000/mt. Gains of LME tin failed to boost buying as weak demand predominated.

In the Shanghai nickel market on Tuesday, mainstream traded prices of Jinchuan nickel in the morning business were between RMB 136,200-136,400/mt, and RMB 135,800-136,000/mt for Russian nickel. During the afternoon business, spot nickel prices advanced along with rising LME nickel prices. As a result, mainstream traded prices for Jinchuan nickel rose to RMB 136,500 /mt, and RMB 136,000-136,200/mt for Russian nickel.

With recently volatile price movements, traders and downstream producers generally chose to make purchases on an as-needed basis, leading to moderate transactions.


base metals; daily review

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