SHANGHAI, Jul. 12 (SMM) – As LME copper prices came under pressure overnight, SHFE 1210 copper contract, the most active one, started RMB 330/mt down at RMB 54,970/mt Wednesday. After the opening, the contract climbed to the 10-day moving average of RMB 55,370/mt amid buying by some longs. However, LME copper prices were pushed down from earlier highs near the midday and caused the contract to experience a wave of small dives, down below the RMB 55,000/mt point. SHFE copper prices stopped falling and began lurching around RMB 55,000/mt in the afternoon. Finally, the most active copper contract for October delivery ended RMB 150/mt or 0.27% down at RMB 55,150/mt, with trading volumes increasing by 19,366 lots but positions decreasing by 4,694 lots. SHFE copper prices won temporary support at the 20-day moving average but the 5 and 10-day moving average saw adhesion at around RMB 55,400/mt amid growing resistance. Hence, SMM believes SHFE copper prices will remain within the same pricing range in the foreseeable future.
As SHFE copper prices lurched weakly in the morning, the SHFE/LME copper price ratio continued to improve and helped spot copper supply remain sufficient. In this context, spot copper premiums stabilized and market activity for high-quality copper became more active. Spot copper offers were generally between premiums of positive RMB 20-100/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 55,500-55,560/mt, and RMB 55,550-55,630/mt for high-quality copper. Near the midday, SHFE copper prices dropped rapidly by RMB 200/mt, so spot copper premiums rose. Downstream producers continued to source to need, and market transactions were thus largely contributed by traders. As SHFE copper prices continued to drift lower in the afternoon, spot copper premium quotes increased further to positive RMB 30-120/mt, while traded prices edged down to RMB 55,400-55,550/mt with some downstream producers continuing to buy as needed.