SMM Daily Review – 2012/4/5 Base Metals Market-Shanghai Metals Market

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SMM Daily Review – 2012/4/5 Base Metals Market

SMM Insight 10:15:42AM Apr 06, 2012 Source:SMM

SHANGHAI, Apr. 6 (SMM) –

Copper

As LME copper prices plunged overnight, SHFE 1207 copper contract prices, the most active one, opened RMB 490/mt lower at RMB 59,560/mt Thursday. However, SHFE copper prices sunk rapidly to a low at RMB 59,140/mt after the opening, but then gradually trended higher as investors made bargain hunting. Near the midday, the Shanghai Composite Index surged by 1.8% to 2,300, helping SHFE copper prices continue to narrow the daily declines but still face resistance at the RMB 60,000/mt. In the afternoon business, as LME copper prices challenged USD 8,400/mt, SHFE copper prices reversed earlier losses after rising to the RMB 60,000/mt mark, reaching an intraday high at RMB 60,080/mt. Finally, the most actively-traded copper contract prices closed at RMB 59,970/mt, still down RMB 80/mt or 0.13%. Positions and trading volumes for the most actively-traded copper contracts increased by 24,018 lots and 96,418 lots, respectively. SHFE copper prices still got great buying support near RMB 59,000/mt, and from copper price movements in spot markets, copper also showed strong resilience. As such, SHFE copper prices were expected to fluctuate further around current values.

Quotations for spot copper discounts narrowed noticeably to between negative RMB 120-60/mt in the morning business, as SHFE copper prices opened significantly lower. Traded prices for standard-quality copper were between RMB 58,850-59,200/mt, and RMB 58,900-59,300/mt for high-quality copper. Market activity was active at price levels below RMB 59,000/mt in the morning business, as traders and downstream producers were active replenishing stocks. Nevertheless, as copper prices advanced, market transactions were restricted. Overall, though, market activity was comparatively brisk during the first trading day following the Qingming Festival. In the afternoon session, as SHFE copper prices surged, spot copper discounts expanded to between negative RMB 150-80/mt, while traded prices rose to RMB 59,100-59,350/mt. Some cargo-holders became unwilling to sell in the afternoon business, causing market transactions to fall.

Aluminum

SHFE 1206 aluminum contract, the most active one, gapped lower at RMB 16,090/mt on the first trading day following Qingming Festival due to the falling LME aluminum prices. On Thursday, the Shanghai Stock Exchange Composite Index maintained a rising trend on account of stronger expectation on easing monetary policy in China. Hence, SHFE aluminum prices rallied briefly in the afternoon, but lacked upward momentum and closed down RMB 90/mt to RMB 16,070/mt, a decrease of 0.56%, the lowest point since January 11. Transactions increased by 3,476 lots to 8,998 lots, and positions were up 1,320 lots to 49,362 lots. Transactions improved slightly compared with pre-holiday market. SMM expects the most active aluminum contact will not likely to rise high in near term due to a lack of upward momentum.

Spot aluminum prices were between RMB 15,930-15,960/mt in Shanghai, with discounts of RMB 10/mt to premiums of RMB 10/mt over the SHFE current-month aluminum price. The current-month contract opened slightly lower influenced by LME aluminum prices after the holiday, and then fluctuated up. In spot markets, traders were willing to purchase at lower prices, with demand downstream tending to stabilize. Meanwhile, sellers were reluctant to move goods due to the falling aluminum prices.

Lead

SHFE lead prices opened RMB 200/mt lower at RMB 15,350/mt on Thursday, and fluctuated up along with the domestic stock markets to regain earlier losses, but met resistance at the 5-day moving average. Prices finally closed up RMB 35/mt to RMB 15,530/mt. Trading volumes were up 54 lots to 286 lots, and positions increased by 86 lots to 2,506 lots.

In domestic spot markets, transactions were quiet on the first trading day following the Qingming Festival holiday. Well-known brands including Shuikoushan, Yuguang and Tongguan were quoted between RMB 15,600-15,630/mt, with premiums of RMB 150/mt over the most active SHFE lead contract prices. Shenqian was quoted at RMB 15,560/mt. In the afternoon, lead prices moved up by RMB 20/mt with SHFE lead prices continuing to rise, and quotations for branded lead were mainly at RMB 15,650/mt. Transactions were limited on the whole.

Zinc
On Thursday, SHFE 1207 zinc contract became the most actively traded, with prices opening at RMB 15,400/mt dragged down by LME zinc prices during the Qingming holiday. SHFE 1207 zinc contract prices dipped to RMB 15,220/mt in the morning session, but rebounded as large numbers of longs entered the market, and gained back previous losses due to rising Shanghai Composite Index. Finally, SHFE 1207 zinc contract prices closed at RMB 15,470/mt, down RMB 30/mt. Trading volumes increased by 60,000 lots to 151,484 lots, and total position increased by 10,254 lots to 157,430 lots.

In domestic spot markets, discounts of #0 zinc were around RMB 150/mt against SHFE 1206 zinc contract prices, with traded prices around RMB 15,100/mt. As SHFE zinc prices gained back losses due to rising Shanghai Composite Index, spot discounts expanded to RMB 170-180/mt, and traded prices edged up to RMB 15,150-15,180/mt. #1 zinc was traded between RMB 15,050-15,100/mt. Transactions were muted in the afternoon, with spot discounts expanding to RMB 200/mt.

Tin

On Thursday, transactions in spot tin markets were modest influenced by falling LME tin prices, leaving strong wait-and-see sentiment in the market. In the morning, mainstream transactions were made between RMB 169,000-170,000/mt, and cargo holders lowered prices to RMB 168,500-170,000/mt due to the dampened trading market. Traded prices for brands including Nanshan, Kaiyuan, Nancang and Guangsheng were mainly between RMB 168,500-169,000/mt, while Yunshan and Yunxi concluded most transactions at RMB 169,500-170,000/mt. Quotations for Yunxi were once at RMB 170,500/mt in the morning, but leaving sparse transactions. In general, the optimism in tin markets boosted by the sharp rise in LME tin prices last weekend failed to last long, with trading returning to modest. Buying interest downstream was depressed, and investors were cautious towards market outlook.

Nickel
On Thursday, mainstream traded prices of Jinchuan’s nickel were between RMB 131,300-131,500/mt, and mainstream Russian nickel prices were between RMB 129,800-130,000/mt. in the afternoon, Russian nickel prices rose to RMB 130,000-130,800/mt, while Jinchuan’s nickel prices did not change significantly. Downstream buyers did not replenish stocks ahead of the Qingming holiday, and neither following the holiday, keeping transactions muted.

 

SMM Daily Review – 2012/4/5 Base Metals Market

SMM Insight 10:15:42AM Apr 06, 2012 Source:SMM

SHANGHAI, Apr. 6 (SMM) –

Copper

As LME copper prices plunged overnight, SHFE 1207 copper contract prices, the most active one, opened RMB 490/mt lower at RMB 59,560/mt Thursday. However, SHFE copper prices sunk rapidly to a low at RMB 59,140/mt after the opening, but then gradually trended higher as investors made bargain hunting. Near the midday, the Shanghai Composite Index surged by 1.8% to 2,300, helping SHFE copper prices continue to narrow the daily declines but still face resistance at the RMB 60,000/mt. In the afternoon business, as LME copper prices challenged USD 8,400/mt, SHFE copper prices reversed earlier losses after rising to the RMB 60,000/mt mark, reaching an intraday high at RMB 60,080/mt. Finally, the most actively-traded copper contract prices closed at RMB 59,970/mt, still down RMB 80/mt or 0.13%. Positions and trading volumes for the most actively-traded copper contracts increased by 24,018 lots and 96,418 lots, respectively. SHFE copper prices still got great buying support near RMB 59,000/mt, and from copper price movements in spot markets, copper also showed strong resilience. As such, SHFE copper prices were expected to fluctuate further around current values.

Quotations for spot copper discounts narrowed noticeably to between negative RMB 120-60/mt in the morning business, as SHFE copper prices opened significantly lower. Traded prices for standard-quality copper were between RMB 58,850-59,200/mt, and RMB 58,900-59,300/mt for high-quality copper. Market activity was active at price levels below RMB 59,000/mt in the morning business, as traders and downstream producers were active replenishing stocks. Nevertheless, as copper prices advanced, market transactions were restricted. Overall, though, market activity was comparatively brisk during the first trading day following the Qingming Festival. In the afternoon session, as SHFE copper prices surged, spot copper discounts expanded to between negative RMB 150-80/mt, while traded prices rose to RMB 59,100-59,350/mt. Some cargo-holders became unwilling to sell in the afternoon business, causing market transactions to fall.

Aluminum

SHFE 1206 aluminum contract, the most active one, gapped lower at RMB 16,090/mt on the first trading day following Qingming Festival due to the falling LME aluminum prices. On Thursday, the Shanghai Stock Exchange Composite Index maintained a rising trend on account of stronger expectation on easing monetary policy in China. Hence, SHFE aluminum prices rallied briefly in the afternoon, but lacked upward momentum and closed down RMB 90/mt to RMB 16,070/mt, a decrease of 0.56%, the lowest point since January 11. Transactions increased by 3,476 lots to 8,998 lots, and positions were up 1,320 lots to 49,362 lots. Transactions improved slightly compared with pre-holiday market. SMM expects the most active aluminum contact will not likely to rise high in near term due to a lack of upward momentum.

Spot aluminum prices were between RMB 15,930-15,960/mt in Shanghai, with discounts of RMB 10/mt to premiums of RMB 10/mt over the SHFE current-month aluminum price. The current-month contract opened slightly lower influenced by LME aluminum prices after the holiday, and then fluctuated up. In spot markets, traders were willing to purchase at lower prices, with demand downstream tending to stabilize. Meanwhile, sellers were reluctant to move goods due to the falling aluminum prices.

Lead

SHFE lead prices opened RMB 200/mt lower at RMB 15,350/mt on Thursday, and fluctuated up along with the domestic stock markets to regain earlier losses, but met resistance at the 5-day moving average. Prices finally closed up RMB 35/mt to RMB 15,530/mt. Trading volumes were up 54 lots to 286 lots, and positions increased by 86 lots to 2,506 lots.

In domestic spot markets, transactions were quiet on the first trading day following the Qingming Festival holiday. Well-known brands including Shuikoushan, Yuguang and Tongguan were quoted between RMB 15,600-15,630/mt, with premiums of RMB 150/mt over the most active SHFE lead contract prices. Shenqian was quoted at RMB 15,560/mt. In the afternoon, lead prices moved up by RMB 20/mt with SHFE lead prices continuing to rise, and quotations for branded lead were mainly at RMB 15,650/mt. Transactions were limited on the whole.

Zinc
On Thursday, SHFE 1207 zinc contract became the most actively traded, with prices opening at RMB 15,400/mt dragged down by LME zinc prices during the Qingming holiday. SHFE 1207 zinc contract prices dipped to RMB 15,220/mt in the morning session, but rebounded as large numbers of longs entered the market, and gained back previous losses due to rising Shanghai Composite Index. Finally, SHFE 1207 zinc contract prices closed at RMB 15,470/mt, down RMB 30/mt. Trading volumes increased by 60,000 lots to 151,484 lots, and total position increased by 10,254 lots to 157,430 lots.

In domestic spot markets, discounts of #0 zinc were around RMB 150/mt against SHFE 1206 zinc contract prices, with traded prices around RMB 15,100/mt. As SHFE zinc prices gained back losses due to rising Shanghai Composite Index, spot discounts expanded to RMB 170-180/mt, and traded prices edged up to RMB 15,150-15,180/mt. #1 zinc was traded between RMB 15,050-15,100/mt. Transactions were muted in the afternoon, with spot discounts expanding to RMB 200/mt.

Tin

On Thursday, transactions in spot tin markets were modest influenced by falling LME tin prices, leaving strong wait-and-see sentiment in the market. In the morning, mainstream transactions were made between RMB 169,000-170,000/mt, and cargo holders lowered prices to RMB 168,500-170,000/mt due to the dampened trading market. Traded prices for brands including Nanshan, Kaiyuan, Nancang and Guangsheng were mainly between RMB 168,500-169,000/mt, while Yunshan and Yunxi concluded most transactions at RMB 169,500-170,000/mt. Quotations for Yunxi were once at RMB 170,500/mt in the morning, but leaving sparse transactions. In general, the optimism in tin markets boosted by the sharp rise in LME tin prices last weekend failed to last long, with trading returning to modest. Buying interest downstream was depressed, and investors were cautious towards market outlook.

Nickel
On Thursday, mainstream traded prices of Jinchuan’s nickel were between RMB 131,300-131,500/mt, and mainstream Russian nickel prices were between RMB 129,800-130,000/mt. in the afternoon, Russian nickel prices rose to RMB 130,000-130,800/mt, while Jinchuan’s nickel prices did not change significantly. Downstream buyers did not replenish stocks ahead of the Qingming holiday, and neither following the holiday, keeping transactions muted.