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SMM Daily Review – 2012/5/29 Copper Market
May 30,2012 08:58CST
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SHFE copper contract for September delivery started RMB 30/mt lower at RMB 55,890/mt Tuesday. Spot copper premiums were between RMB 140-200/mt in the morning business.

SHANGHAI, May 30 (SMM) – The most active SHFE copper contract for September delivery started RMB 30/mt lower at RMB 55,890/mt Tuesday. After the opening, the contract lurched around RMB 55,800/mt as shorts imposed selling pressures, testing a low at RMB 55,680/mt. In the afternoon however, as LME copper rose to USD 7,700/mt again on a rapidly falling US dollar index, and since the Shanghai Composite Index surged by 1.3%, SHFE 1209 copper contract gained rising momentum after hovering narrowly around RMB 56,100/mt, touching a high at RMB 56,230/mt at the tail of trading. Nevertheless, owing to large-scale position closings, the most active copper contract pared daily gains before finally ending RMB 160/mt or 0.29% higher at RMB 56,080/mt, with trading volumes increasing by 30,140 lots but positions decreasing by 5,468 lots. Positions for all SHFE copper contracts fell by 15,620 lots. Longs chose to take profit-taking at the highs during the day, and combined with a lack of substantive support, SHFE copper prices faced the risk to slide further over the near term.

SHFE copper prices fluctuated and met resistance to rebound. Spot copper supply remained stable. Spot copper premiums were quoted between positive RMB 140-200/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 56,550-56,600/mt, and RMB 56,580-56,700/mt for high-quality copper. High-quality copper dominated the market supply. The price differential between standard and high-quality copper was still limited. Downstream producers and traders were still hesitant to buy. Coupled with cash flow problems, market transaction volumes were light in the morning. In the afternoon, as SHFE copper prices reversed early losses, spot copper premium quotes fell to positive RMB 100-170/mt. Traded prices inched up to RMB 56,680-56,750/mt in the afternoon. Copper price movement took a V shape for two consecutive days, but prices rose abruptly in the afternoon. However, owing to cash flow issues at the month-end, spot copper premiums were smaller than earlier. Copper consumption was also not seen to improve noticeably.


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