SHANGHAI, Mar. 26 (SMM) –As LME copper prices plunged by 1.6% overnight, the most actively-traded SHFE 1206 copper contract opened RMB 120/mt lower at RMB 59,840/mt Friday. SHFE copper prices fluctuated narrowly around the opening price during the whole trading day, with a fluctuating band only within RMB 200/mt and reaching a low at RMB 59,560/mt. At the tail of trading, as LME copper prices abruptly gained momentum, SHFE copper prices rose rapidly, and broke through the RMB 60,000/mt mark to an intraday high of RMB 60,050/mt as large-scale positions were closed. Finally, SHFE 1206 copper contract closed at RMB 60,030/mt, up RMB 70/mt or 0.12%. Positions for SHFE 1206 copper contract were down 15,050 lots, and trading volumes were down 166,000 lots, highlighting increasing risk aversion sentiment before the weekend. Speculative activities decreased sharply. SHFE copper prices still faced resistance at RMB 60,000/mt but showed strong resilience. 

Discounts on spot copper narrowed to between negative RMB 250-180/mt in the morning business, as SHFE copper prices moved lower after a low open despite showing resilience. Traded prices for standard-quality copper were between RMB 59,080-59,120/mt, and RMB 59,120-59,200/mt for high-quality copper. Spot copper supply was stable and remained sufficient during the whole trading day. Downstream producers and traders were cautious and made modest purchases at lower price levels. Copper inventories monitored by the SHFE decreased by 3,644 mt to 223,632 mt in the week ending March 23rd, reflecting that the delivery date for SHFE 1203 copper contracts had ended, and that downstream producers increased buying at the lows during the week. This indicates downstream orders already increased, so copper consumption is likely to improve significantly in April.