SHANGHAI, Mar. 30 (SMM) –
As LME copper prices extended losses overnight, the most actively-traded SHFE 1206 copper contract opened RMB 520/mt lower at RMB 59,820/mt Thursday. As the Shanghai Composite Index continued to fall by 1.5% during the day, SHFE copper prices fluctuated weakly around RMB 59,600/mt and faced new resistance at the RMB 60,000/mt mark, with an intraday high and low at RMB 59,950/mt and RMB 59,510/mt, respectively. Finally, SHFE 1206 copper contract prices closed at RMB 59,740/mt, down RMB 600/mt or 0.99%. Positions and trading volumes for SHFE 1206 copper contracts decreased by 19,582 lots and 5,700 lots, respectively, while those for SHFE 1206 copper contracts increased by 18,356 lots and 93,794 lots, respectively. In this context, the shift of the most actively-traded copper contracts was expected to be completed Friday. Trading sentiment was low during the whole trading day, and SHFE copper prices would test support at the 60-day moving average repeatedly.
SHFE copper prices fluctuated weakly after a low open, and spot copper supply remained stable, helping spot copper discounts narrow. Quotations for spot copper discounts thus narrowed to between negative RMB 220-150/mt in the morning business. Traded prices for standard-quality copper were between RMB 58,970-59,070/mt, and RMB 59,000-59,150/mt for high-quality copper. The price differential between standard- and high-quality copper continued to fall during the day. Traders and downstream producers became more willing to buy at price levels below RMB 59,000/mt, a sign of preparing for stocks before the Qingming Festival. In the afternoon business, SHFE copper prices continued to post weak performance, but spot copper supply decreased, with stand-quality copper rarely seen in markets, which caused spot copper discounts to narrow further to between negative RMB 200-120/mt. Traded prices, though, held firm at levels above RMB 59,000/mt in the afternoon business.
As Asian equity markets continued to shed losses, still led by the Shanghai Composite Index, the most active SHFE aluminum contract for June delivery closed down RMB 45/mt or 0.28% at RMB 16,170/mt on Thursday. Transacted contracts dropped 3,074 lots to 9,632 lots as investors move to the sidelines with flat Chinese and US economic data, weak domestic demand and the coming Qingming Festival.
Spot aluminum traded between RMB 15,970-16,000/mt in Shanghai, at discounts of RMB 0-40/mt over the SHFE current-month aluminum price. The current-month contract stayed near RMB 16,000/mt despite heading down of other contracts. Some SHFE-approved aluminum ingots were traded at the current-month futures price as their holders stick to the RMB 16,000/mt mark. Trading stayed quite light, though, ahead of the Qingming Festival.
On Thursday, the most active SHFE lead prices moved around RMB 15,450/mt in the morning and fell in the afternoon along with domestic stocks. SHFE lead prices finally closed the day down RMB 175/mt to RMB 15,385/mt. Trading volumes decreased by 36 lots to 496 lots and positions were up 120 lots to 2,400 lots.
Domestic spot prices kept falling. Well-known brands such as Chihong Zn & Ge and Yubei were quoted between RMB 15,640-15,650/mt, and quotations for Dongling and Hanjiang were mainly around RMB 15,620/mt. In the afternoon, quotations for well-known brands remained unchanged at RMB 15,650/mt despite the decline of SHEF lead prices, but brands such as Hanjiang were only quoted at RMB 15,570/mt. Trading was still light. Downstream enterprises were seeking for goods at lower prices as lead prices fell, but traders and smelters were not willing to move goods, leaving transactions quiet.
SHFE three-month zinc contract prices opened at RMB15, 405/mt on Thursday, and moved between RMB 15,450-15,500/mt in the morning session, around the moving average. As the Shanghai Composite Index continued to fall, SHFE three-month zinc contract prices dipped to close at RMB 15,340/mt, down RMB 250/mt or 1.6%. Trading volumes decreased by nearly 50,000 lots to 124,560 lots, and total position decreased by 14,114 lots to 173,380 lots. Positions of SHFE 1207 zinc contract increased by 8,390 lots to 150,728 lots.
In domestic spot markets, discounts of #0 zinc were around RMB 200/mt, with traded prices between RMB 15,230-15,250/mt, and #1 zinc was traded between RMB 15,180-15,200/mt. The overall transactions were brisk with dip-buying.
Spot tin prices stayed between RMB 169,000-170,500/mt on Thursday in Shanghai while trading remained thin in the face of weak demand and a strong wait-and-see sentiment. Yunshan, Jinlong and Kaiyuan concluded transactions between RMB 169,000-169,500/mt. Yunxi struck deals within a higher band of RMB 170,000-170,500/mt. Some Yunxi ingots were quoted at RMB 171,000/mt but consensus was hardly reached. A bearish attitude stayed among some goods holders.
During Thursday’s Asian trading hours, LME nickel prices continued to be weighed by steady decline in China’s stock market. During the European and US trading hours, a slew of vital economic data will be announced, such as unemployment data from the Germany, which will affect Italy’s government bond auction, and Q4 GDP and initial jobless claim, which may be used as references to decide whether or not to implement the QE3. LME nickel prices hit a low at USD 17,510/mt and were still on downward track, but showing oversold signs.
During the morning trading hours in the Shanghai nickel spot market, mainstream traded prices of nickel from Jinchuan Group were in the RMB 130,500-131,000/mt range, and mainstream traded prices of nickel from Russia were in the RMB 129,500-129,700/mt range. During the afternoon trading hours, spot nickel prices fell sharply due to sluggish downstream demand. Mainstream traded prices of nickel from Russia fell to RMB 129,000-129,500/mt and mainstream traded prices of nickel from Jinchuan Group fell to RMB 130,500-130,800/mt. Although market prices were lower than ex-works nickel prices from Jinchuan Group, traders still believed that nickel prices would fall further, and were still eager to move goods in order to generate cash.