SMM Daily Review - 2012/7/3 Base Metals Market-Shanghai Metals Market

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SMM Daily Review - 2012/7/3 Base Metals Market

Price Review & Forecast 10:14:55AM Jul 04, 2012 Source:SMM

SHANGHAI, Jul. 4 (SMM) –

Copper
As LME copper gave up some of the gains overnight, SHFE 1210 copper contract, the most active one, started RMB 170/mt down at RMB 55,320/mt Tuesday. The contract stabilized at the daily moving average following the opening but still suffered resistance at RMB 55,500/mt. LME copper surged rapidly to USD 7,800/mt during major trading hours and helped the contract increase above the RMB 56,000/mt mark, with a high at RMB 56,310/mt. In the afternoon, SHFE 1210 copper contract was restricted at the 60-day moving average and hovered at a relatively high level of RMB 56,100/mt. The Shanghai Composite Index dipped from earlier highs at the tail of trading, and led SHFE copper prices to lose RMB 56,000/mt. Finally, SHFE 1210 copper contract still closed RMB 610/mt or 1.10% higher at RMB 56,100/mt, with trading volumes adding by 109,000 lots but positions decreasing by 13,438 lots. As shorts returned a wait-and-see posture temporarily to shun risks during the day, SHFE copper prices failed to effectively break resistance at the 60-day moving average and are likely to test this price point repeatedly for the foreseeable future.
 
As SHFE copper prices fluctuated narrowly between RMB 55,800-55,850/mt in the early trading session, spot copper offers maintained slight premiums and attracted some traders to buy at the lows. However, SHFE copper prices followed LME copper to experience three rounds of surges during major trading hours, up by RMB 600/mt, compelling traders who made purchases earlier to move goods aggressively for cash. This caused spot copper premiums to fall swiftly, with high-quality copper even trading at about discounts of negative RMB 50/mt. Mainstream spot copper offers were between discounts of negative RMB 150-0/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 55,800-56,150/mt, and RMB 55,850-56,300/mt for high-quality copper. Downstream producers resisted prices above RMB 56,000/mt and merely bought as needed, while some traders made purchases when discounts for standard-quality copper expanded to around negative RMB 150/mt. In this context, market transactions were mainly contributed by traders. In the afternoon, as SHFE copper prices edged down due to resistance, spot copper discounts narrowed to negative RMB 80-20/mt, while traded prices stood completely above RMB 56,000/mt, up to RMB 56,150-56,300/mt.

Aluminum
The most active SHFE aluminum contract for October delivery started at RMB 15,465/mt and closed up a slight RMB 40/mt or 0.26% at RMB 15,500/mt on Tuesday, after a struggle within RMB 15,390-15,525/mt. Considerable support has been found at the 10-day moving average. Positions added 910 lots to 117,232 lots while transacted contracts increased 16,088 lots to 66,340 lots. The light metal’s slight rebound was made possible partly by gains in other base metals prices which had forced out more shorts. However, the aluminum market has yet to gather more confidence given weak global manufacturing data and tight liquidity.

Spot aluminum was sold mainly at RMB 15,540-15,570/mt in Shanghai, with low-iron aluminum trading at RMB 15,650-15,660/mt. While SHFE aluminum prices stagnated, spot trading has been light amid high selling interest but extremely weak buying, dragging down the mainstream trading band. Stable prices were seen only for SHFE-approved aluminum ingots in short supply.

Lead
On Tuesday, SHFE lead prices opened RMB 135/mt higher at RMB 14,900/mt. In the morning trading, SHFE lead prices fluctuated up to touch RMB 15,000/mt due to longs at RMB 14,950/mt, and finally closed at RMB 14,980/mt, up RMB 215/mt, or 1.46%. Trading volumes were down 48 lots to 260 lots, while positions were down 50 lots to 1,848 lots.

SHFE lead prices started RMB 160/mt higher and fell after rising to the RMB 15,000/mt line on Tuesday. Quotations in China’s spot lead markets increased about RMB 75/mt. Well-known brands including Shuikoushan were quoted at RMB 14,950/mt, with spot premiums of RMB 20/mt over the most active SHFE lead price. Hanjiang was quoted at RMB 14,870/mt and Hengchang was quoted at RMB 14,800/mt. Offers from Nanfang were rarely reported. Smelters were still reluctant to sell goods, while traders were actively moving goods. Purchases by Downstream buyers improved as buyers bought on the way up.

Zinc
On Tuesday, SHFE 1210 zinc contract prices opened lower at RMB 14,710/mt, and surged to RMB 14,880/mt, boosted by the Shanghai Composite Index, and fell slightly near the end of the morning session. In the afternoon, SHFE 1210 zinc contract prices fluctuated high with SHFE copper prices, but fell slightly at the end of trading, below the moving average. Finally, SHFE 1210 zinc contract prices closed at RMB 14,850/mt, up RMB 155/mt, or 1.05%. Trading volumes increased by 21,110 lots to 144,106 lots, and total position decreased by 3,090 lots to 181,562 lots.

In domestic spot markets, discounts of #0 zinc against SHFE 1210 zinc contract prices were around RMB 100/mt, with traded prices between RMB 14,680-14,700/mt. Discounts of spot goods expanded to RMB 120-130/mt in the morning session as SHFE zinc prices rose but spot prices resisted increases, and #0 zinc prices were between RMB 14,700-14,720/mt. #1 zinc was quoted between RMB 14,640-14,680/mt. Downstream buying interest was low. Some traders won arbitrage opportunity, while some smelters released some spot goods due to higher prices.
 
Tin
In Shanghai tin market, traded prices for tin ingots were mainly between RMB 146,000-148,000/mt on Tuesday. The declines in spot tin prices were arrested since LME tin prices rallied during Asian trading session for two days. Traders bought goods cautiously due to disappointing sales, and goods available in the market were fewer. Downstream buyers were more willing to purchase as LME tin prices fluctuated up after opening. In the afternoon, tin prices moved up, with Jinlong and Yunheng mainly traded at RMB 147,000/mt, while transactions for Yunxi were primarily concluded between RMB 147,500-148,000/mt. Trading turned better in general.

Nickel
On Tuesday, mainstream prices of Jinchuan nickel were between RMB 122,300-122,500/mt in the morning session, while mainstream Russian nickel prices were between RMB 120,000-120,200/mt. Traders were actively moving goods in the morning, but downstream buyers were cautious at higher prices, leaving transactions quiet. As LME nickel prices rose by nearly RMB 300/mt in the afternoon, spot prices were raised in response. Mainstream prices of Jinchuan nickel rose to RMB 122,700-123,000/mt, while quotes for Russian nickel surged to RMB 120,800-121,000/mt. Transactions were actively made among traders, but downstream buying interest was still low.


 

Key Words:  LME   SHFE   base metal   metal price 

SMM Daily Review - 2012/7/3 Base Metals Market

Price Review & Forecast 10:14:55AM Jul 04, 2012 Source:SMM

SHANGHAI, Jul. 4 (SMM) –

Copper
As LME copper gave up some of the gains overnight, SHFE 1210 copper contract, the most active one, started RMB 170/mt down at RMB 55,320/mt Tuesday. The contract stabilized at the daily moving average following the opening but still suffered resistance at RMB 55,500/mt. LME copper surged rapidly to USD 7,800/mt during major trading hours and helped the contract increase above the RMB 56,000/mt mark, with a high at RMB 56,310/mt. In the afternoon, SHFE 1210 copper contract was restricted at the 60-day moving average and hovered at a relatively high level of RMB 56,100/mt. The Shanghai Composite Index dipped from earlier highs at the tail of trading, and led SHFE copper prices to lose RMB 56,000/mt. Finally, SHFE 1210 copper contract still closed RMB 610/mt or 1.10% higher at RMB 56,100/mt, with trading volumes adding by 109,000 lots but positions decreasing by 13,438 lots. As shorts returned a wait-and-see posture temporarily to shun risks during the day, SHFE copper prices failed to effectively break resistance at the 60-day moving average and are likely to test this price point repeatedly for the foreseeable future.
 
As SHFE copper prices fluctuated narrowly between RMB 55,800-55,850/mt in the early trading session, spot copper offers maintained slight premiums and attracted some traders to buy at the lows. However, SHFE copper prices followed LME copper to experience three rounds of surges during major trading hours, up by RMB 600/mt, compelling traders who made purchases earlier to move goods aggressively for cash. This caused spot copper premiums to fall swiftly, with high-quality copper even trading at about discounts of negative RMB 50/mt. Mainstream spot copper offers were between discounts of negative RMB 150-0/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 55,800-56,150/mt, and RMB 55,850-56,300/mt for high-quality copper. Downstream producers resisted prices above RMB 56,000/mt and merely bought as needed, while some traders made purchases when discounts for standard-quality copper expanded to around negative RMB 150/mt. In this context, market transactions were mainly contributed by traders. In the afternoon, as SHFE copper prices edged down due to resistance, spot copper discounts narrowed to negative RMB 80-20/mt, while traded prices stood completely above RMB 56,000/mt, up to RMB 56,150-56,300/mt.

Aluminum
The most active SHFE aluminum contract for October delivery started at RMB 15,465/mt and closed up a slight RMB 40/mt or 0.26% at RMB 15,500/mt on Tuesday, after a struggle within RMB 15,390-15,525/mt. Considerable support has been found at the 10-day moving average. Positions added 910 lots to 117,232 lots while transacted contracts increased 16,088 lots to 66,340 lots. The light metal’s slight rebound was made possible partly by gains in other base metals prices which had forced out more shorts. However, the aluminum market has yet to gather more confidence given weak global manufacturing data and tight liquidity.

Spot aluminum was sold mainly at RMB 15,540-15,570/mt in Shanghai, with low-iron aluminum trading at RMB 15,650-15,660/mt. While SHFE aluminum prices stagnated, spot trading has been light amid high selling interest but extremely weak buying, dragging down the mainstream trading band. Stable prices were seen only for SHFE-approved aluminum ingots in short supply.

Lead
On Tuesday, SHFE lead prices opened RMB 135/mt higher at RMB 14,900/mt. In the morning trading, SHFE lead prices fluctuated up to touch RMB 15,000/mt due to longs at RMB 14,950/mt, and finally closed at RMB 14,980/mt, up RMB 215/mt, or 1.46%. Trading volumes were down 48 lots to 260 lots, while positions were down 50 lots to 1,848 lots.

SHFE lead prices started RMB 160/mt higher and fell after rising to the RMB 15,000/mt line on Tuesday. Quotations in China’s spot lead markets increased about RMB 75/mt. Well-known brands including Shuikoushan were quoted at RMB 14,950/mt, with spot premiums of RMB 20/mt over the most active SHFE lead price. Hanjiang was quoted at RMB 14,870/mt and Hengchang was quoted at RMB 14,800/mt. Offers from Nanfang were rarely reported. Smelters were still reluctant to sell goods, while traders were actively moving goods. Purchases by Downstream buyers improved as buyers bought on the way up.

Zinc
On Tuesday, SHFE 1210 zinc contract prices opened lower at RMB 14,710/mt, and surged to RMB 14,880/mt, boosted by the Shanghai Composite Index, and fell slightly near the end of the morning session. In the afternoon, SHFE 1210 zinc contract prices fluctuated high with SHFE copper prices, but fell slightly at the end of trading, below the moving average. Finally, SHFE 1210 zinc contract prices closed at RMB 14,850/mt, up RMB 155/mt, or 1.05%. Trading volumes increased by 21,110 lots to 144,106 lots, and total position decreased by 3,090 lots to 181,562 lots.

In domestic spot markets, discounts of #0 zinc against SHFE 1210 zinc contract prices were around RMB 100/mt, with traded prices between RMB 14,680-14,700/mt. Discounts of spot goods expanded to RMB 120-130/mt in the morning session as SHFE zinc prices rose but spot prices resisted increases, and #0 zinc prices were between RMB 14,700-14,720/mt. #1 zinc was quoted between RMB 14,640-14,680/mt. Downstream buying interest was low. Some traders won arbitrage opportunity, while some smelters released some spot goods due to higher prices.
 
Tin
In Shanghai tin market, traded prices for tin ingots were mainly between RMB 146,000-148,000/mt on Tuesday. The declines in spot tin prices were arrested since LME tin prices rallied during Asian trading session for two days. Traders bought goods cautiously due to disappointing sales, and goods available in the market were fewer. Downstream buyers were more willing to purchase as LME tin prices fluctuated up after opening. In the afternoon, tin prices moved up, with Jinlong and Yunheng mainly traded at RMB 147,000/mt, while transactions for Yunxi were primarily concluded between RMB 147,500-148,000/mt. Trading turned better in general.

Nickel
On Tuesday, mainstream prices of Jinchuan nickel were between RMB 122,300-122,500/mt in the morning session, while mainstream Russian nickel prices were between RMB 120,000-120,200/mt. Traders were actively moving goods in the morning, but downstream buyers were cautious at higher prices, leaving transactions quiet. As LME nickel prices rose by nearly RMB 300/mt in the afternoon, spot prices were raised in response. Mainstream prices of Jinchuan nickel rose to RMB 122,700-123,000/mt, while quotes for Russian nickel surged to RMB 120,800-121,000/mt. Transactions were actively made among traders, but downstream buying interest was still low.


 

Key Words:  LME   SHFE   base metal   metal price