SHANGHAI, Apr. 28 (SMM) – The Shanghai Composite Index met resistance at 2,400 and SHFE copper prices had less upward momentum compared with LME copper, despite higher low-end prices and solid support at RMB 57,500/mt. SHFE copper prices rose to a high of RMB 58,650/mt, but still met strong resistance at the 20-day moving average. SHFE 1208 copper contracts became the most actively-traded copper contracts during the week, but since there was virtually no price difference among all SHFE copper contracts, little speculative activity and low trading volumes were reported.
In spot markets last week, the SHFE/LME copper price ratio continued to fall, increasing losses for imported copper. In response, cargo-holders of imported copper cut sale volumes. Both suppliers and buyers were restricted by month-end cash flow problems. Spot copper discounts expanded as SHFE copper prices rebounded. However, speculative activity was low since there was virtually no price difference among SHFE copper contracts. Downstream producers chose to replenish stocks at price lows early last week, but turned cautious as the week progressed, keeping overall market transactions low.
In the coming week, if LME copper prices continue to move higher, SHFE copper prices will break through the 20-day moving average and test a high-end price of RMB 59,500/mt.