SHANGHAI, Jul. 6 (SMM) – As LME copper price movement was restricted overnight, SHFE 1210 copper contract, the most active one, started RMB 70/mt down at RMB 55,950/mt Thursday. The contract hovered around the daily moving average following the opening and touched a high at RMB 56,110/mt. However, as the Shanghai Composite Index fell significantly and lost 2,200 in the afternoon, the contract retreated and directly tested a low at RMB 55,660/mt, the 5-day moving average. SHFE 1210 copper contract, though, clawed back some of daily losses after gaining technical support, before rallying and fluctuating around the daily moving average. Finally, the most active copper contract ended at RMB 55,980/mt, still down RMB 40/mt or 0.07%, with trading volumes increasing by 23,014 lots but positions decreasing by 4,856 lots. Both longs and shorts continued to conduct intraday operations while awaiting results of the European Central Bank’s meeting Thursday evening. SHFE copper prices need to gather impetus to break resistance at the RMB 56,000/mt mark but have gained growing support at the low-end.
SHFE copper prices came under pressure and helped spot copper discounts narrow marginally despite sufficient market supply. Spot copper offers were between discounts of negative RMB 60/mt and premiums of positive RMB 20/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 56,150-56,300/mt, and RMB 56,200-56,350/mt for high-quality copper. As copper prices slipped near the midday, cargo-holders in spot markets held divergent views. Cargo-holders who were optimistic towards future copper prices insisted on premiums of positive RMB 0/mt, while pessimists chose to step up sales volumes and offered large discounts. Traders favored high-quality copper with discounts, and downstream producers stuck to a source-to-order strategy. In the afternoon, SHFE copper prices inched down, and spot copper market activity seemed to become weaker, causing spot copper offers to stand between discounts of negative RMB 30/mt and premiums of positive RMB 20/mt. Traded prices were between RMB 56,050 -56,220/mt in the afternoon.