SHANGHAI, Jun. 18 (SMM) –
As LME copper held firm overnight, SHFE 1209 copper contract, the most active one, started RMB 310/mt up at RMB 54,370/mt Friday. After the opening, a sliding US dollar index helped LME copper break resistance at USD 7,500/mt, which caused the contract to rise all the way amid position closings. SHFE 1209 copper contract touched a high at RMB 55,120/mt in the afternoon after breaking resistance at RMB 55,000/mt. Finally, the most active copper contract closed RMB 1,010/mt or 1.87% higher at RMB 55,070/mt, with trading volumes and positions decreasing by 11,140 lots and 27,880 lots, respectively. Total trading volumes for all SHFE copper contracts added by 27,880 lots, but total positions fell by 40,286 lots. Risk aversion amongst shorts and longs grew ahead of the Greek election, and SHFE copper failed to gain entirely effective support at the 20-day moving average of RMB 54,600/mt.
SHFE copper prices rebounded noticeably by more than 1%, with the price spread between SHFE 1206 and 1207 copper contract remaining around RMB 300/mt during the last trading day for SHFE 1206 copper contract. Spot copper offers thus all turned into discounts of negative RMB 120-50/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 55,350-55,400/mt, and RMB 55,380-55,450/mt for high-quality copper. Spot copper supply remained stable. Cargo-holders held divergent views, with some actively moving goods at the highs. Others, though, chose to hold back goods owing to large discounts. However, downstream producers still stood on the sidelines, awaiting clear directions in the coming week. Overall market activity was muted as a result. In the afternoon, SHFE copper stabilized at the highs, but some traders in spot markets chose to enter the market, helping copper discount offers narrow gradually and turn into slight premiums. Mainstream spot copper offers were between discounts of negative RMB 0/mt and premiums of positive RMB 80/mt in the afternoon, while traded prices were between RMB 55,380-55,550/mt. SHFE copper stocks decreased by 2,278 mt to 130,143 mt last Friday, and the drop in stocks narrowed sharply, an indication that downstream producers' buying was restricted at prices above RMB 55,000/mt.
The most active SHFE aluminum contract for September delivery started lower at RMB 15,860/mt and settled up a slight RMB 10/mt or 0.06% at RMB 15,865/mt. Pressure at the 5-day moving average was still strong. Transacted contracts dropped 1,436 lots to 5,250 lots during cautious trading before the weekend. Fundamentals have not changed much. Total inventories dropped slightly. Demand remained weak. Aluminum price fluctuations are more related with macroeconomic news.
Spot aluminum was traded at RMB 15,870-15,890/mt in Shanghai, with low-iron aluminum trading at RMB 15,950-15,970/mt. Mainstream traded prices of the light metal were RMB 15,870-15,890/mt in Hangzhou, and RMB 15,880-15,890/mt in Wuxi. The current-month contract moved narrowly between RMB 15,860-15,880/mt. Pressure remains strong at the 5-day moving average. The light metal was sold with discounts of RMB 0-20/mt in Shanghai. The selling interest was high as the delivery date is near but buying was cautious. Some stock replenishments were seen in Wuxi and Hangzhou. Overall trading was flat.
On Friday, SHFE lead prices gapped higher at RMB 15,095/mt. Most investors left the market and waited on the sidelines, so market staged a weak trend. SHFE lead prices moved narrowly for the whole day and closed at RMB 15,105/mt, up RMB 125/mt from the previous trading day. Trading volumes were up 52 lots to 142 lots, while positions were down 58 lots to 2,180 lots.
On Friday, branded lead in China's spot lead market, including Nanfang, Chengyuan, and Shuikoushan were quoted at RMB 15,150/mt, with spot premiums of RMB 50-70/mt against the most active SHFE lead contract price. Mengzi and Hanjiang were quoted between RMB 15,080-15,100/mt. Offers of Shenqian was at RMB 15,020/mt. Smelters moved goods normally and dealer were interested in selling goods. But downstream buyers remained cautious, leaving transactions muted.
Last Friday, SHFE 1209 zinc contract prices opened slightly higher and surged to the 20-day moving average, fluctuating between RMB 14,850-14,870/mt. Large numbers of shorts left the market at the end of trading, pushing up SHFE 1209 zinc contract prices to close at RMB 14,910/mt, up RMB 120/mt or 0.81%. Trading volumes decreased by 6,382 lots to 61,700 lots, and total position decreased by 8,040 lots to 157992 lots.
In domestic spot markets, discounts of #0 zinc against SHFE three-month zinc contract prices were RMB 80-120/mt, with traded prices between RMB 14,740-14,760/mt. #1 zinc was quoted between RMB 14,700-14,740/mt. Spot zinc prices rose along with SHFE zinc prices, and traders were moving goods actively at higher prices, with downstream buyers purchasing modestly. But due to a wait-and-see sentiment prior to Greece's general election, most transactions were made among traders, leaving transactions modest.
On Friday, traded prices in Shanghai tin market were mainly between RMB 150,000-151,500/mt, and transactions remained unimproved due to the weak demand. Transactions for Nanshan, Jinhai, Jinlong, Yunxiang and Yunheng were mainly concluded between RMB 149,500-150,000/mt, while mainstream traded prices for Yunxi were around RMB 151,500/mt. In the afternoon, goods quoted lower were spares with traded prices mainly within the RMB 149,700-150,000/mt range. Market fundamentals showed no important changes, and investors continued focusing on the Greek election.
Last Friday, mainstream prices of Jinchuan nickel were between RMB 124,500-124,700/mt, while mainstream Russian nickel prices were between RMB 121,500-121,800/mt. The market was cautious as Greece's general election was going to take place at the weekend; traders were unwilling to move goods due to narrowing arbitrage room, so goods supplies in the market was tight, with transactions still muted.