SHANGHAI, Jun. 4 (SMM) – As LME copper fluctuated feebly overnight, the most active SHFE copper contract for September delivery started RMB 50/mt lower at RMB 54,400/mt last Friday. The contract fell abruptly immediately following the opening as China's PMI released by the China Federation of Logistics & Purchasing was lower than expected, but then rose and hovered narrowly around RMB 54,500/mt after gaining buying support at RMB 54,210/mt. The contract reached an intraday high at RMB 54,730/mt. However, owing to large-scale position closings at the tail of trading, SHFE 1209 copper contract finally reversed early gains before closing RMB 120/mt or 0.22% down at RMB 54,330/mt, with trading volumes and positions increasing by 39,292 lots and 5,652 lots, respectively. Long and short investors held divergent views during the day, but both of them opted to leave the market to avert risks before the weekends. Despite improved cash flows, total positions for all SHFE copper contracts increased sharply by 11,762 lots during the first trading day of June, and total trading volumes also added significantly by 17,748 lots. This meant SHFE copper prices would suffer more selling pressures from short investors and search support at lower price levels for the foreseeable future.
SHFE copper prices met resistance to rebound as China's PMI was reported to fall further in May according to the China Federation of Logistics & Purchasing. Spot copper premiums, though, held stable between positive RMB 180-270/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 55,400-55,480/mt, and RMB 55,450-55,550/mt for high-quality copper. Cargo-holders held divergent views before the weekends. Those who wanted to shun risks chose to sell aggressively for cash, while copper smelters held back goods. Traders exhibited little interest in buying, but some downstream producers with improved cash flows bought as needed, leading to modest market transactions in the morning. In the afternoon, as SHFE copper prices slid from earlier highs, mainstream offers for spot copper premiums inched up to positive RMB 180-280/mt. However, market participants were wary of operations, leaving market transactions little changed from the morning business levels. SHFE copper stocks decreased by 10,445 mt to 147,044 mt last Friday, a suggestion that some downstream producers made purchases as copper prices retreated during the week.