SMM Daily Review – 2012/6/13 Base Metals Market-Shanghai Metals Market

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SMM Daily Review – 2012/6/13 Base Metals Market

SMM Insight 11:05:55AM Jun 14, 2012 Source:SMM

SHANGHAI, Jun. 14 (SMM)--

Copper:
SHFE 1209 copper contract started RMB 190/mt higher at RMB 53,960/mt Wednesday, and then fluctuated around RMB 54,000/mt. In the afternoon, as the Shanghai Composite Index broke resistance at 2,300 and surged by 1.3%, and since LME copper rallied from the lows, the contract climbed to RMB 54,140/mt and completely stood above the daily moving average. Finally, SHFE 1209 copper contract settled RMB 300/mt or 0.56% higher at RMB 54,070/mt, with trading volumes and positions falling by 35,142 lots and 5,992 lots, respectively. Positions for all SHFE copper contracts decreased by 7,170 lots. Trading sentiment weakened noticeably during the week, so SHFE copper should stay volatile ahead of the Greek election.

SHFE copper prices rebounded marginally, with the price spread between SHFE 1206 and 1207 copper contract still standing around RMB 400/mt. Cargo-holders in spot markets thus were actively moving goods, resulting in sufficient market supply. Hence, spot copper premium quotes narrowed to positive RMB 70-140/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 54,780-54,820/mt, and RMB 54,820-54,900/mt for high-quality copper. Traders tried to bid down premiums on high-quality copper, contributing the most to market transactions, while downstream producers still sourced to order. Therefore, overall market supply still exceeded demand. In the afternoon, SHFE copper prices stabilized and began moving higher, but as some speculators in spot markets chose to enter the market, spot copper premium offers stayed virtually unchanged from the morning levels. The highest traded price reached nearly RMB 55,000/mt in the afternoon, but overall market transactions were smaller than the morning.  

Aluminum:
The most active SHFE aluminum contract for September delivery started at RMB 15,860/mt and settled up RMB 45/mt or 0.28% at RMB 15,900/mt supported by the Shanghai Composite Index's return above 2,300 points. Transacted contracts were only 2,246 lots and positions added 56 lots to 100,990 lots. The contract succeeded in returning above the 5-day moving average but support has been weak. Investors are expected to await the Greek election result and the most active SHFE aluminum contract will still face heavy pressure at the RMB 15,900/mt mark.

Spot aluminum was sold at RMB 15,870-15,900/mt, with low-iron ingots trading at RMB 15,960-15,980/mt. The bottom of SHFE aluminum prices climbed slightly, helping spot aluminum prices consolidate. However, supply remained excessive, posing heavy pressure at RMB 15,900/mt. Spot aluminum prices in Wuxi and Hangzhou also struggled at the mark and only a few deals were done at high-end prices. Overall trading was still light, with total traded volumes staying little changed.

Lead:
SHFE lead prices opened at RMB 15,035/mt and moved narrowly between RMB 15,000-15,020/mt Wednesday, to finally close at RMB 15,015/mt, down RMB 10/mt from the previous trading day. SHFE lead prices were still under resistance at the 5 and 10-day moving averages. Trading volumes rose by 106 lots to 210 lots, and positions were up 18 lots to 2,218 lots.

Quotations for branded lead in China's spot lead market, including Nanfang and Shuikoushan, were between RMB 15,100-15,110/mt, with spot premiums of RMB 100/mt against the most active SHFE lead contract price. Brands from Gejiu region were quoted at RMB 15,000/mt. Offers of Shenqian was at RMB 14,960/mt. Selling interest of smelters was low, and dealers in Shanghai were unwilling to sell goods due to limited supply for branded lead and uncertain market outlook. Buyers purchased cautiously and transactions were weak.

Zinc:
On Wednesday, SHFE 1209 zinc contract prices opened at RMB 14,805/mt and plummeted to an intraday low of RMB 14735/mt after opening, and then fluctuated around the 5-day moving average. As the Shanghai Composite Index rose in the midday, SHFE 1209 zinc contract prices rose to struggle at the 20-day moving average, but failed to break through that level. As the end of trading, as the US dollar index weakened, SHFE 1209 zinc contract prices were up slightly to RMB 14,850/mt, and finally closed at RMB 14,820/mt, up RMB 70 or 0.47%. Trading volumes increased by 462 lots to 54,614 lots, and total position increased by 1,106 lots to 168,946 lots.

In domestic spot markets, discounts of #0 zinc against SHFE three-month zinc contract prices were RMB 60-90/mt, with traded prices between RMB 14,680-14,700/mt. #1 zinc was quoted between RMB 14,640-14,680/mt, with transactions muted. Smelters only supplied for long-term contract due to lower-than-cost prices, and traders lacked arbitrage room due to narrow price spread between futures and spot prices, and downstream buying interest was also low due to the lack of confidence and sluggish orders, all leaving transactions modest.

Tin:
Mainstream traded prices in Shanghai tin market were between RMB 151,000-152,000/mt on Wednesday. Inquiries were scarce due to sluggish demand and supply in the market remained low against the unstable economic environment. Nanshan, Jinlong, Jinhai and Yunheng were mainly traded between RMB 151,000-151,500/mt, with a few goods quoted at RMB 150,500/mt. Traded prices for Yunxi were between RMB 151,500-152,000/mt. Tin supply fell since most smelters cut production recently, and since smelters were unwilling to sell at low tin prices. Limited supply pared the declines in tin prices. Demand downstream remained weak, and pessimism prevailed in the market.

Nickel:
On Wednesday, Mainstream prices of Jinchuan nickel were between RMB 124,200-124,500/mt, while mainstream Russian nickel prices were between RMB 121,300-121,500/mt. LME nickel prices fell in the morning, but there was still arbitrage room. Spot quotes were firm, allowing downstream buying interest to improve and trading volumes to increase. Besides, stainless steel plants continued to cut output of #300 stainless steel recently and produced #200 and #400 stainless steel to reduce costs. But nickel prices will be impacted if output of #300 stainless steel continued to contract.

 

 

SMM Daily Review – 2012/6/13 Base Metals Market

SMM Insight 11:05:55AM Jun 14, 2012 Source:SMM

SHANGHAI, Jun. 14 (SMM)--

Copper:
SHFE 1209 copper contract started RMB 190/mt higher at RMB 53,960/mt Wednesday, and then fluctuated around RMB 54,000/mt. In the afternoon, as the Shanghai Composite Index broke resistance at 2,300 and surged by 1.3%, and since LME copper rallied from the lows, the contract climbed to RMB 54,140/mt and completely stood above the daily moving average. Finally, SHFE 1209 copper contract settled RMB 300/mt or 0.56% higher at RMB 54,070/mt, with trading volumes and positions falling by 35,142 lots and 5,992 lots, respectively. Positions for all SHFE copper contracts decreased by 7,170 lots. Trading sentiment weakened noticeably during the week, so SHFE copper should stay volatile ahead of the Greek election.

SHFE copper prices rebounded marginally, with the price spread between SHFE 1206 and 1207 copper contract still standing around RMB 400/mt. Cargo-holders in spot markets thus were actively moving goods, resulting in sufficient market supply. Hence, spot copper premium quotes narrowed to positive RMB 70-140/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 54,780-54,820/mt, and RMB 54,820-54,900/mt for high-quality copper. Traders tried to bid down premiums on high-quality copper, contributing the most to market transactions, while downstream producers still sourced to order. Therefore, overall market supply still exceeded demand. In the afternoon, SHFE copper prices stabilized and began moving higher, but as some speculators in spot markets chose to enter the market, spot copper premium offers stayed virtually unchanged from the morning levels. The highest traded price reached nearly RMB 55,000/mt in the afternoon, but overall market transactions were smaller than the morning.  

Aluminum:
The most active SHFE aluminum contract for September delivery started at RMB 15,860/mt and settled up RMB 45/mt or 0.28% at RMB 15,900/mt supported by the Shanghai Composite Index's return above 2,300 points. Transacted contracts were only 2,246 lots and positions added 56 lots to 100,990 lots. The contract succeeded in returning above the 5-day moving average but support has been weak. Investors are expected to await the Greek election result and the most active SHFE aluminum contract will still face heavy pressure at the RMB 15,900/mt mark.

Spot aluminum was sold at RMB 15,870-15,900/mt, with low-iron ingots trading at RMB 15,960-15,980/mt. The bottom of SHFE aluminum prices climbed slightly, helping spot aluminum prices consolidate. However, supply remained excessive, posing heavy pressure at RMB 15,900/mt. Spot aluminum prices in Wuxi and Hangzhou also struggled at the mark and only a few deals were done at high-end prices. Overall trading was still light, with total traded volumes staying little changed.

Lead:
SHFE lead prices opened at RMB 15,035/mt and moved narrowly between RMB 15,000-15,020/mt Wednesday, to finally close at RMB 15,015/mt, down RMB 10/mt from the previous trading day. SHFE lead prices were still under resistance at the 5 and 10-day moving averages. Trading volumes rose by 106 lots to 210 lots, and positions were up 18 lots to 2,218 lots.

Quotations for branded lead in China's spot lead market, including Nanfang and Shuikoushan, were between RMB 15,100-15,110/mt, with spot premiums of RMB 100/mt against the most active SHFE lead contract price. Brands from Gejiu region were quoted at RMB 15,000/mt. Offers of Shenqian was at RMB 14,960/mt. Selling interest of smelters was low, and dealers in Shanghai were unwilling to sell goods due to limited supply for branded lead and uncertain market outlook. Buyers purchased cautiously and transactions were weak.

Zinc:
On Wednesday, SHFE 1209 zinc contract prices opened at RMB 14,805/mt and plummeted to an intraday low of RMB 14735/mt after opening, and then fluctuated around the 5-day moving average. As the Shanghai Composite Index rose in the midday, SHFE 1209 zinc contract prices rose to struggle at the 20-day moving average, but failed to break through that level. As the end of trading, as the US dollar index weakened, SHFE 1209 zinc contract prices were up slightly to RMB 14,850/mt, and finally closed at RMB 14,820/mt, up RMB 70 or 0.47%. Trading volumes increased by 462 lots to 54,614 lots, and total position increased by 1,106 lots to 168,946 lots.

In domestic spot markets, discounts of #0 zinc against SHFE three-month zinc contract prices were RMB 60-90/mt, with traded prices between RMB 14,680-14,700/mt. #1 zinc was quoted between RMB 14,640-14,680/mt, with transactions muted. Smelters only supplied for long-term contract due to lower-than-cost prices, and traders lacked arbitrage room due to narrow price spread between futures and spot prices, and downstream buying interest was also low due to the lack of confidence and sluggish orders, all leaving transactions modest.

Tin:
Mainstream traded prices in Shanghai tin market were between RMB 151,000-152,000/mt on Wednesday. Inquiries were scarce due to sluggish demand and supply in the market remained low against the unstable economic environment. Nanshan, Jinlong, Jinhai and Yunheng were mainly traded between RMB 151,000-151,500/mt, with a few goods quoted at RMB 150,500/mt. Traded prices for Yunxi were between RMB 151,500-152,000/mt. Tin supply fell since most smelters cut production recently, and since smelters were unwilling to sell at low tin prices. Limited supply pared the declines in tin prices. Demand downstream remained weak, and pessimism prevailed in the market.

Nickel:
On Wednesday, Mainstream prices of Jinchuan nickel were between RMB 124,200-124,500/mt, while mainstream Russian nickel prices were between RMB 121,300-121,500/mt. LME nickel prices fell in the morning, but there was still arbitrage room. Spot quotes were firm, allowing downstream buying interest to improve and trading volumes to increase. Besides, stainless steel plants continued to cut output of #300 stainless steel recently and produced #200 and #400 stainless steel to reduce costs. But nickel prices will be impacted if output of #300 stainless steel continued to contract.