SHANGHAI, Mar. 15 (SMM) –As LME copper prices closed significantly higher overnight, SHFE 1206 copper contract prices, the most active one, opened RMB 450/mt higher at RMB 61,330/mt Wednesday. SHFE copper prices suffered profit-taking immediately after the opening, and as prices met resistance at RMB 61,500/mt, short investors began to enter the market, which in turn dampened prices. In the afternoon business, Chinese stock markets dived by more than 150 to below 2,400, a slump of nearly 2.7%, dragging down SHFE copper prices, which gained falling momentum and moved away from the daily moving average, with the low-end price touching RMB 60,460/mt. Finally, SHFE 1206 copper contract prices closed at RMB 60,530/mt, down RMB 350/mt or 0.57%. Positions for SHFE 1206 copper contract were up 11,330 lots, and trading volumes were up 96,586 lots. With weak support at the 30-day moving average, SHFE copper prices would test the 5-day moving average of RMB 60,500/mt.
In spot markets, as SHFE copper prices moved lower after a high open, some hedged copper was locked, leading to a drop in spot copper supply. The price gap between SHFE 1203 and 1204 copper contract remained at RMB 400/mt, so cargo-holders were unwilling to make more concessions when offering prices, which were between discounts of negative RMB 40/mt and premiums of positive RMB 50/mt in the morning business. Traded prices for standard-quality copper were between RMB 60,100-60,200/mt, and RMB 60,150-60,300/mt for high-quality copper. Downstream producers stuck to the sidelines above RMB 60,000/mt during the whole trading day, but increased purchases when copper prices slid. Overall market transactions were limited in the morning session, though. In the afternoon business, as SHFE copper prices slid faster, hedged copper came into markets, propelling cargo-holders to move goods. However, spot copper offers held firm above premiums of positive RMB 0/mt in the afternoon session, but traded prices declined to between RMB 59,700-60,050/mt, with some downstream producers stepping up purchases at the lows.