SHANGHAI, May 24 (SMM) – The most active SHFE 1209 copper contract opened RMB 700/mt lower at RMB 55,250/mt Wednesday, as LME copper retreated overnight. The contract fluctuated narrowly between RMB 55,000-55,300/mt after the opening, with a high at only RMB 55,290/mt. In the afternoon session, as LME copper tested last week’s low of USD 7,620/mt, and since Chinese stock markets also fell, SHFE 1209 copper contract lost ground rapidly, down below RMB 55,000/mt to RMB 54,710/mt while shorts increased selling pressures. Nevertheless, position closing at the tail of trading helped SHFE 1209 copper contract pare some of daily losses before finally ending at RMB 55,000/mt, down RMB 950/mt or 1.7%. Positions and trading volumes for the most active copper contract added by 39,198 lots and 138,000 lots, respectively. With growing selling pressures, SHFE copper found weak support at RMB 54,700/mt.
SHFE copper prices opened significantly down, but cargo-holders in spot markets insisted on moving goods at prices above RMB 56,000/mt. Spot copper premiums thus rose to above positive RMB 300/mt. Spot copper premiums were quoted between positive RMB 250-320/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 56,000-56,120/mt, and RMB 56,050-56,150/mt for high-quality copper. Some traders were optimistic about future premiums and therefore opted to hold back goods, but cargo-holders of hedged copper became more willing to move goods. Spot copper supply remained stable. Downstream producers were hesitant to buy at around RMB 56,000/mt, leaving market activity quiescent in the morning. In the afternoon session, as SHFE 1206 copper contract fell to around RMB 55,500/mt, spot copper premium quotes rose further to positive RMB 280-350/mt. Traded prices basically came under pressure at RMB 56,000/mt, between RMB 55,850-56,000/mt in the afternoon, but market activity remained lackluster.