SMM Weekly Review and Forecast (Jul. 2- Jul. 6)-Shanghai Metals Market

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SMM Weekly Review and Forecast (Jul. 2- Jul. 6)

Price Review & Forecast 05:29:34PM Jul 09, 2012 Source:SMM

SHANGHAI, Jul. 9 (SMM) –

Copper:
China's PMI data reports from both the China Federation of Logistics & Purchasing (CFLP) and HSBC were below expectations and sent the Shanghai Composite Index down sharply by over 1% to below 2,200. The Shanghai Composite Index did not rebound following PBOC's cut in interest rates, while SHFE copper prices also weakened to between RMB 55,300-56,300/mt with noticeable resistance at RMB 56,000/mt, despite touching a high at the 60-day moving average during the week. Support for SHFE copper prices was also weakening based on technical indicators, although trading volumes were up during the first week of July.

In spot markets last week, imported copper cargo-holders insisted on firm prices and had little interest in selling goods for cash given the falling SHFE/LME copper price ratio. As a result, spot copper discounts narrowed gradually during the week, and high-quality copper discounts turned into slight premiums. Traded prices were above RMB 56,000/mt, but cargo-holders had different opinions on future price trends. Although traders were active buying spot copper and selling futures copper contracts, downstream producers continued to buy only as needed.

SMM anticipates SHFE copper prices hovering in the coming week between RMB 55,000 and 56,500/mt.

Aluminum:
Aluminum prices rebounded last week as a European bailout deal and interest rate cuts cheered up investors. LME aluminum consolidated at USD 1,900/mt and broke through the 30-day moving average to hit a high of USD 1,993/mt. Cautious responses from longs, however, caused prices to stagnate near USD 1,950/mt during the second half of the week while awaiting more direction from European and US economic data. SHFE aluminum prices climbed to a high of RMB 15,790/mt, but found only weak support at RMB 15,600/mt. Spot aluminum prices tracked SHFE aluminum prices in the Shanghai market, climbing from RMB 15,550/mt to near RMB 15,700/mt. Buying remained weak, however, despite price cuts by traders since downstream enterprises continued to purchase on an as-needed basis.

Zinc:
Aluminum prices rebounded last week as a European bailout deal and interest rate cuts cheered up investors. LME aluminum consolidated at USD 1,900/mt and broke through the 30-day moving average to hit a high of USD 1,993/mt. Cautious responses from longs, however, caused prices to stagnate near USD 1,950/mt during the second half of the week while awaiting more direction from European and US economic data. SHFE aluminum prices climbed to a high of RMB 15,790/mt, but found only weak support at RMB 15,600/mt. Spot aluminum prices tracked SHFE aluminum prices in the Shanghai market, climbing from RMB 15,550/mt to near RMB 15,700/mt. Buying remained weak, however, despite price cuts by traders since downstream enterprises continued to purchase on an as-needed basis.

Lead:
Last week, SHFE lead prices rose above RMB 15,000/mt, up from RMB 14,700/mt, but still met resistance at the 30-day moving average. SHFE lead prices are expected to remain above RMB 15,000/mt this week, but meet strong resistance at the 60-day moving average.
In China's domestic spot markets, lead prices remained between RMB 14,720-15,000/mt last week, with spot premiums over the most active SHFE lead price narrowing from RMB 150/mt to RMB 10-20/mt. Some smelters showed greater interest in selling as spot lead prices stabilized, while downstream buyers were also more active purchasing. Spot lead prices should rise along with SHFE lead prices, with prices for branded lead hovering above RMB 15,000/mt. Smelters will be more willing to sell since prices have been rising steadily since early June, but downstream buyers should still continue to purchase based only on orders. Buying interest is expected to improve with the coming high-demand season for electric vehicles in July, although demand will be weaker than in past years.

Tin:
Last week, mainstream traded prices in Shanghai tin market were between RMB 148,000-149,000/mt, and supply for well-known brands was insufficient with transactions mainly made for Yunxi and Yunheng. Recently, smelters limited sales, leaving nearly no goods from Jiangxi circulating in the market, which gave certain support to tin prices. Early last week, trading improved slightly as buyers bought on the way up, but later turned modest since downstream enterprises have completed replenishment and since LME tin prices fell back. Given the weak demand, SMMI.Sn showed slightest increase of 1.02% last week.

Nickel:
Last Thursday, spot nickel prices averaged RMB 121,580/mt, up RMB 740/mt. Jinchuan Group raised nickel prices to RMB 124,000/mt, an increase of RMB 3,000/mt. Due to the unfavorable Shanghai/LME nickel price ratio, Russian nickel imports were low. Spot prices rose early in the week following Jinchuan's price increase, but downstream purchasing was quiet, with transactions mainly between traders. Spot prices fell along with fluctuating LME nickel prices, causing most downstream buyers to stay out of the market, leaving transactions muted.

 

Price

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62% Fe Fines (Qingdao Port): IOPI62
Oct.18
705.0
-8.0
(-1.12%)
62% Fe Fines (Qingdao Port, CFR Equiv.)
Oct.18
92.1
-1.0
(-1.03%)
58% Fe Fines (Qingdao Port): IOPI58
Oct.18
624.0
-2.0
(-0.32%)
58% Fe Fines (Qingdao Port, CFR Equiv.)
Oct.18
82.0
-0.2
(-0.19%)
65% Fe Fines (Qingdao Port): IOPI65
Oct.18
745.0
-5.0
(-0.67%)

SMM Weekly Review and Forecast (Jul. 2- Jul. 6)

Price Review & Forecast 05:29:34PM Jul 09, 2012 Source:SMM

SHANGHAI, Jul. 9 (SMM) –

Copper:
China's PMI data reports from both the China Federation of Logistics & Purchasing (CFLP) and HSBC were below expectations and sent the Shanghai Composite Index down sharply by over 1% to below 2,200. The Shanghai Composite Index did not rebound following PBOC's cut in interest rates, while SHFE copper prices also weakened to between RMB 55,300-56,300/mt with noticeable resistance at RMB 56,000/mt, despite touching a high at the 60-day moving average during the week. Support for SHFE copper prices was also weakening based on technical indicators, although trading volumes were up during the first week of July.

In spot markets last week, imported copper cargo-holders insisted on firm prices and had little interest in selling goods for cash given the falling SHFE/LME copper price ratio. As a result, spot copper discounts narrowed gradually during the week, and high-quality copper discounts turned into slight premiums. Traded prices were above RMB 56,000/mt, but cargo-holders had different opinions on future price trends. Although traders were active buying spot copper and selling futures copper contracts, downstream producers continued to buy only as needed.

SMM anticipates SHFE copper prices hovering in the coming week between RMB 55,000 and 56,500/mt.

Aluminum:
Aluminum prices rebounded last week as a European bailout deal and interest rate cuts cheered up investors. LME aluminum consolidated at USD 1,900/mt and broke through the 30-day moving average to hit a high of USD 1,993/mt. Cautious responses from longs, however, caused prices to stagnate near USD 1,950/mt during the second half of the week while awaiting more direction from European and US economic data. SHFE aluminum prices climbed to a high of RMB 15,790/mt, but found only weak support at RMB 15,600/mt. Spot aluminum prices tracked SHFE aluminum prices in the Shanghai market, climbing from RMB 15,550/mt to near RMB 15,700/mt. Buying remained weak, however, despite price cuts by traders since downstream enterprises continued to purchase on an as-needed basis.

Zinc:
Aluminum prices rebounded last week as a European bailout deal and interest rate cuts cheered up investors. LME aluminum consolidated at USD 1,900/mt and broke through the 30-day moving average to hit a high of USD 1,993/mt. Cautious responses from longs, however, caused prices to stagnate near USD 1,950/mt during the second half of the week while awaiting more direction from European and US economic data. SHFE aluminum prices climbed to a high of RMB 15,790/mt, but found only weak support at RMB 15,600/mt. Spot aluminum prices tracked SHFE aluminum prices in the Shanghai market, climbing from RMB 15,550/mt to near RMB 15,700/mt. Buying remained weak, however, despite price cuts by traders since downstream enterprises continued to purchase on an as-needed basis.

Lead:
Last week, SHFE lead prices rose above RMB 15,000/mt, up from RMB 14,700/mt, but still met resistance at the 30-day moving average. SHFE lead prices are expected to remain above RMB 15,000/mt this week, but meet strong resistance at the 60-day moving average.
In China's domestic spot markets, lead prices remained between RMB 14,720-15,000/mt last week, with spot premiums over the most active SHFE lead price narrowing from RMB 150/mt to RMB 10-20/mt. Some smelters showed greater interest in selling as spot lead prices stabilized, while downstream buyers were also more active purchasing. Spot lead prices should rise along with SHFE lead prices, with prices for branded lead hovering above RMB 15,000/mt. Smelters will be more willing to sell since prices have been rising steadily since early June, but downstream buyers should still continue to purchase based only on orders. Buying interest is expected to improve with the coming high-demand season for electric vehicles in July, although demand will be weaker than in past years.

Tin:
Last week, mainstream traded prices in Shanghai tin market were between RMB 148,000-149,000/mt, and supply for well-known brands was insufficient with transactions mainly made for Yunxi and Yunheng. Recently, smelters limited sales, leaving nearly no goods from Jiangxi circulating in the market, which gave certain support to tin prices. Early last week, trading improved slightly as buyers bought on the way up, but later turned modest since downstream enterprises have completed replenishment and since LME tin prices fell back. Given the weak demand, SMMI.Sn showed slightest increase of 1.02% last week.

Nickel:
Last Thursday, spot nickel prices averaged RMB 121,580/mt, up RMB 740/mt. Jinchuan Group raised nickel prices to RMB 124,000/mt, an increase of RMB 3,000/mt. Due to the unfavorable Shanghai/LME nickel price ratio, Russian nickel imports were low. Spot prices rose early in the week following Jinchuan's price increase, but downstream purchasing was quiet, with transactions mainly between traders. Spot prices fell along with fluctuating LME nickel prices, causing most downstream buyers to stay out of the market, leaving transactions muted.