SHANGHAI, Mar. 28 (SMM) –As LME copper prices surged overnight, the most actively-traded SHFE 1206 copper contract opened RMB 700/mt higher at RMB 60,900/mt Tuesday. SHFE copper prices fell and came under pressure at the daily moving average after the opening, continuing to fluctuate narrowly in the face of weak Chinese stock markets, finding temporary support at RMB 60,570/mt. At the tail of trading, as LME copper prices rallied, SHFE copper prices broke resistance at the daily moving average, but failed to soar through RMB 61,000/mt before reaching a high at RMB 60,950/mt. Finally, SHFE 1206 copper contract prices slid below the daily moving average as positions were closed, but still ended RMB 510/mt or 0.85% higher at RMB 60,710/mt. Positions for SHFE 1206 copper contracts were down 14,470 lots, and trading volumes were down 9,200 lots. Positions and trading volumes for SHFE 1207 copper contracts, though, increased by 11,860 lots, and 38,110 lots, respectively, a sign of the shift of the most actively-traded copper contracts. Speculative interest was limited, and SHFE copper prices still faced pressures at the RMB 61,000/mt mark.
In spot markets, as SHFE copper prices were pressured down following a high open, quotations for copper discounts expanded to between negative RMB 330-250/mt in the morning business. Traded prices for standard-quality copper were between RMB 59,750-59,830/mt, and RMB 59,800-59,900/mt for high-quality copper. Some hedged copper was still locked. Cargo-holders of standard-quality copper and low-quality hydro-copper refused to move goods at large discounts, leading to a significant drop in copper supply, and causing their price spread to fall. Traders with adequate cash favored high-quality copper, while downstream producers hesitated to buy at the highs, bringing market activity into stalemate in the morning session. In the afternoon business, hedged copper kept locked as SHFE copper prices rose, so market supply decreased, while some cargo-holders became more optimistic about future prices. Spot copper discounts, though, expanded slightly to between negative RMB 350-280/mt in the afternoon session, while traded prices rose to between RMB 59,750-60,000/mt. Nevertheless, downstream producers became more wary at prices near RMB 60,000/mt, leaving market activity still quiet in the afternoon session.