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SMM Daily Review – 2012/5/3 Copper Market
May 4,2012 08:52CST
smm insight
SHFE 1208 copper contract opened RMB 250/mt lower at RMB 58,500/mt Thursday. Spot copper was between discounts RMB 20/mt and premiums RMB 40/mt in the morning business.

SHANGHAI, May 4 (SMM) – As LME copper prices fell and tested support at the 30-day moving average overnight, SHFE 1208 copper contract, the most active one, opened RMB 250/mt lower at RMB 58,500/mt Thursday. SHFE copper prices posted weak performance following the opening, fluctuating narrowly below their moving averages and reaching a high at only RMB 58,550/mt. In the afternoon session, SHFE copper prices slid below RMB 58,300/mt and trended lower towards RMB 58,010/mt. Finally, SHFE 1208 copper contract ended at RMB 58,100/mt, down RMB 650/mt or 1.11%, with positions increasing by 14,738 lots but trading volumes decreasing by 35,486 lots. Due to great selling pressures from short investors, SHFE copper prices may lose the 5-day moving average, but with strong support at the RMB 58,000/mt mark.

SHFE copper prices trended lower after starting down. Copper supply in spot markets was tight, stimulated by news that Jiangxi Copper and other smelters and trading firms delivered copper to the LME warehouses. As a consequence, domestic copper held price quotes firm, and premiums for high-quality copper climbed. Standard-quality copper prices were also firm owing to tight supply. Spot copper was quoted between discounts of negative RMB 20/mt and premiums of positive RMB 40/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 58,280-58,340/mt, and RMB 58,320-58,400/mt for high-quality copper. Speculators bought aggressively, while downstream producers still purchased on an as-needed basis. Market suppliers and buyers showed increasing divergence, with the former trying to promote sales but the latter generally staying cautious. In the afternoon business, SHFE copper prices slid further, so spot copper premiums rose to positive RMB 50-60/mt, while traded prices retreated to RMB 58,150-58,300/mt, with tightness in high-quality copper supply.

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