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SMM Daily Review – 2012/4/27 Copper Market
Apr 28,2012 08:55CST
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SHFE 1208 copper contract opened RMB 550/mt higher at RMB 58,510/mt Friday. Spot copper discounts expanded to negative RMB 110-50/mt in Shanghai in the morning business.

SHANGHAI, Apr. 28 (SMM) – As LME copper prices rallied to USD 8,300/mt overnight, SHFE 1208 copper contract, the most active one, opened RMB 550/mt higher at RMB 58,510/mt Friday. As long and short investors increased positions, SHFE copper prices fluctuated within RMB 300/mt after the opening, and only reached a high at RMB 58,640/mt. In the afternoon session, SHFE copper prices basically lurched stably above their daily moving average, but edged lower at the tail of trading as long investors took profit-taking. SHFE 1208 copper contract finally ended RMB 500/mt or 0.86% higher at RMB 58,460/mt, with trading volumes and positions decreasing by 49,086 lots and 1,248 lots, respectively. New positions built by both long and short investors amounted to about 12,000 lots during the day, implying severe struggle between them. SHFE copper prices will face great resistance at the 20-day moving average of RMB 58,500/mt over the near term, and have an uneven road to trend higher.

As SHFE copper prices rebounded marginally after a high open, spot copper discounts expanded to negative RMB 110-50/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 58,200-58,280/mt, and RMB 58,230-58,350/mt for high-quality copper. Losses for imported copper continued, so domestic copper cargo-holders became more willing to move goods for cash generation, leading to stable market supply. Some downstream producers opted to replenish stocks ahead of the May Day holiday, but risk aversion was still strong. In the afternoon session, as SHFE copper prices drifted slightly higher, and as some downstream producers increased purchases during the last trading hours owing to the holiday, cargo-holders in spot markets insisted on higher price quotations. Spot copper discounts held virtually flat with the morning business levels, while traded prices surged to RMB 58,300-58,400/mt, with active market activity at the tail of trading. SHFE copper stocks were reported to decrease by 6,408 mt to 204,762 mt in the week ending April 27th, which was due largely to the fact some downstream producers had the needs to replenish stocks for the holiday. This also implied that copper consumption may improve further for the foreseeable future.

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