SHANGHAI, Jul. 2 (SMM) – As LME copper remained weak overnight, SHFE 1210 copper contract, the most active one, started RMB 130/mt lower at RMB 54,070/mt last Friday. After the opening, the contract hovered narrowly around RMB 54,150/mt amid position closings. Near the midday, the euro surged and helped LME copper soar through USD 7,500/mt. The Shanghai Composite Index also climbed by 1.4% and caused the contract to break resistance at RMB 55,000/mt before continuing to climb up, since longs took the opportunity to enter markets. SHFE 1210 copper contract touched a high at RMB 55,410/mt in the afternoon and basically lurched around RMB 55,200/mt before the tail of trading. Finally, SHFE 1210 copper contract closed RMB 1,040/mt or 1.92% higher at RMB 55,240/mt, with trading volumes increasing by 265,000 lots but positions decreasing by 16,868 lots. Total trading volumes for all SHFE copper contracts added by 336,000 lots, while positions fell by 35,614 lots. Both longs and shorts were eager to close positions amid rebounding copper prices, but longs had little interest in keeping up with rising prices at above RMB 55,000/mt. Longs and shorts will continue to struggle around RMB 55,000/mt during July, but the low-end SHFE copper price is likely to rise.
SHFE copper prices opened lower in the morning, but cargo-holders in spot markets were selling aggressively during the last trading day of June, leading spot copper premiums to fall and even turn into discounts. Spot copper offers were between discounts of negative RMB 80/mt and premiums of positive RMB 20/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 54,700-55,100/mt, and RMB 54,750-55,200/mt for high-quality copper. As the euro surged near the midday and helped LME copper soar, SHFE 1207 copper contract also increased by nearly RMB 1,000/mt, depressing cargo-holders of hedged copper in spot markets. In the context, cargo-holders in spot markets quoted mixed prices, and market activity became more lackluster at prices above RMB 55,000/mt owing to cash flow problems. In the afternoon, SHFE copper prices rose further, but spot copper market transactions were limited owing to the same cash flow problems. Some cargo-holders still chose to move goods at discounts, with mainstream copper discounts offered between negative RMB 80-20/mt, while traded prices increased to RMB 55,500-55,680/mt. However, market activity remained muted in the afternoon. SHFE copper stocks added by 2,358 mt to 139,442 mt last Friday, highlighting cash flow problems at the month’s end and sluggish consumption.