SHANGHAI, Jul. 5 (SMM) – As LME copper steadied at the highs overnight, SHFE 1210 copper contract, the most active one, started RMB 100/mt up at RMB 56,020/mt Wednesday. Following suits in LME copper, the contract climbed to RMB 56,300/mt after the opening. However, as the US dollar index rebounded, LME copper came under pressure and began sliding. Coupled with a slipping Shanghai Composite Index, SHFE 1210 copper contract also trended down and touched a low at RMB 55,810/mt in the afternoon. Finally, the most active copper contract for October delivery still closed RMB 50/mt or 0.09% higher at RMB 55,970/mt, with trading volumes and positions decreasing by 162,000 lots and 9,562 lots, respectively. SHFE copper prices tested support at the 60-day moving average as both shorts and longs conducted intraday operations, awaiting directions from central banks’ moves later and trying to hold to the 60-day moving average effectively.
SHFE copper prices slipped after initially surging, so the SHFE/LME copper price ratio continued to fall, depressing imported copper cargo-holders’ interest in moving goods. In consequence, spot copper discount quotes narrowed from the previous session. Mainstream spot copper offers were between discounts of negative RMB 70/mt and premiums of positive RMB 50/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 56,150-56,330/mt, and RMB 56,200-56,430/mt for high-quality copper. Some cargo-holders of high-quality copper still offered slight discounts in the morning and enticed some traders to make purchases. However, spot copper discounts narrowed rapidly near the midday as copper prices retreated, and high-quality copper offers turned into slight premiums. Downstream producers stuck to the sidelines, so market transactions were still dominated by traders and speculators. In the afternoon, as SHFE copper prices continued to come under pressure, mainstream spot offers were between discounts of negative RMB 40/mt and premiums of positive RMB 40/mt, while traded prices inched down to RMB 56,100 -56,250/mt. Trading sentiment was lower in the afternoon than that in the morning.