SMM Daily Review – 2012/7/6 Copper Market-Shanghai Metals Market

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SMM Daily Review – 2012/7/6 Copper Market

Price Review & Forecast 09:02:01AM Jul 09, 2012 Source:SMM

SHANGHAI, Jul. 9 (SMM) – SHFE 1210 copper contract, the most active one, started slightly down by RMB 30/mt at RMB 55,940/mt last Friday. China’s central bank’s move in cutting interest rates merely lifted copper markets marginally since investors considered this as a further slow in the Chinese economy. In this context, the Shanghai Composite Index slid to a recent low again, while LME copper prices began slipping owing to a rebounding US dollar index. Shorts increased positions and exerted selling immediately after the opening since they believed economic figures to be released July 9 would remain weak. As a result, SHFE copper prices retreated all the way and only touched a high at RMB 56,08o/mt but with a low at RMB 55,500/mt. Nevertheless, both LME and the Shanghai Composite Index rallied in the afternoon and helped SHFE copper prices return to around the daily moving average and narrow daily losses. Finally, SHFE 1210 copper contract ended RMB 190/mt or 0.34% lower at RMB 55,720/mt, with trading volumes adding by 29,338 lots but positions decreasing by 4,728 lots. Trading volumes and positions for SHFE 1211 copper contract increased by 19,242 lots and 10,584 lots, respectively. As selling pressures for forward SHFE copper contracts were high, and coupled with overlapping at the 5 and 60-day moving averages, SHFE copper prices are unlikely to maintain current highs for the near future.

SHFE copper prices came under pressure and dipped, compelling cargo-holders in spot markets to step up sales volumes. They offered large discounts for low-quality copper but insisted on firm prices for high-quality copper owing to limited supply. In this context, the price spread between standard and high-quality copper widened. Spot copper offers were between discounts of negative RMB 50/mt and premiums of positive RMB 50/mt in the morning business. Traded prices for standard-quality copper were between RMB 55,900-56,120/mt, and RMB 55,950-56,200/mt for high-quality copper. Downstream producers continued to buy on an as-needed basis as caution grew again in the face of uncertainty over copper price trends in the coming week. Market transactions were restricted as a result. In the afternoon, SHFE copper prices stopped falling, and some downstream producers in spot markets chose to buy as needed when copper prices dropped below RMB 56,000/mt Hence, spot copper premiums rose some in the afternoon, with mainstream offers between discounts of negative RMB 20/mt and premiums of positive RMB 60/mt, while traded prices stayed flat with the morning levels. SHFE copper stocks were reported to add by 15,795 mt to 155,237 mt last Friday, which was due partly to the fact cargo-holders of imported copper met difficult in moving goods on account of a sliding SHFE/LME copper price ratio. Besides, despite speculative activities, downstream producers were not seen to make substantive purchases.

 

 

SMM Daily Review – 2012/7/6 Copper Market

Price Review & Forecast 09:02:01AM Jul 09, 2012 Source:SMM

SHANGHAI, Jul. 9 (SMM) – SHFE 1210 copper contract, the most active one, started slightly down by RMB 30/mt at RMB 55,940/mt last Friday. China’s central bank’s move in cutting interest rates merely lifted copper markets marginally since investors considered this as a further slow in the Chinese economy. In this context, the Shanghai Composite Index slid to a recent low again, while LME copper prices began slipping owing to a rebounding US dollar index. Shorts increased positions and exerted selling immediately after the opening since they believed economic figures to be released July 9 would remain weak. As a result, SHFE copper prices retreated all the way and only touched a high at RMB 56,08o/mt but with a low at RMB 55,500/mt. Nevertheless, both LME and the Shanghai Composite Index rallied in the afternoon and helped SHFE copper prices return to around the daily moving average and narrow daily losses. Finally, SHFE 1210 copper contract ended RMB 190/mt or 0.34% lower at RMB 55,720/mt, with trading volumes adding by 29,338 lots but positions decreasing by 4,728 lots. Trading volumes and positions for SHFE 1211 copper contract increased by 19,242 lots and 10,584 lots, respectively. As selling pressures for forward SHFE copper contracts were high, and coupled with overlapping at the 5 and 60-day moving averages, SHFE copper prices are unlikely to maintain current highs for the near future.

SHFE copper prices came under pressure and dipped, compelling cargo-holders in spot markets to step up sales volumes. They offered large discounts for low-quality copper but insisted on firm prices for high-quality copper owing to limited supply. In this context, the price spread between standard and high-quality copper widened. Spot copper offers were between discounts of negative RMB 50/mt and premiums of positive RMB 50/mt in the morning business. Traded prices for standard-quality copper were between RMB 55,900-56,120/mt, and RMB 55,950-56,200/mt for high-quality copper. Downstream producers continued to buy on an as-needed basis as caution grew again in the face of uncertainty over copper price trends in the coming week. Market transactions were restricted as a result. In the afternoon, SHFE copper prices stopped falling, and some downstream producers in spot markets chose to buy as needed when copper prices dropped below RMB 56,000/mt Hence, spot copper premiums rose some in the afternoon, with mainstream offers between discounts of negative RMB 20/mt and premiums of positive RMB 60/mt, while traded prices stayed flat with the morning levels. SHFE copper stocks were reported to add by 15,795 mt to 155,237 mt last Friday, which was due partly to the fact cargo-holders of imported copper met difficult in moving goods on account of a sliding SHFE/LME copper price ratio. Besides, despite speculative activities, downstream producers were not seen to make substantive purchases.