SMM Daily Review – 2012/7/12 Base Metals Market-Shanghai Metals Market

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SMM Daily Review – 2012/7/12 Base Metals Market

Price Review & Forecast 10:59:26AM Jul 13, 2012 Source:SMM

SHANGHAI, Jul. 13 (SMM)--

Copper:
SHFE 1210 copper contract, the most active one, started RMB 110/mt up at RMB 55,290/mt Thursday. The contract dropped rapidly below RMB 55,000/mt to RMB 54,900/mt in the morning session as longs closed positions and then fluctuated weakly around this price mark. However, in the afternoon session, as the Shanghai Composite Index rallied from earlier lows, the contract began stabilizing and returned above the daily moving average, drifting gradually higher to around RMB 55,200/mt. Finally, SHFE 1210 copper contract settled RMB 70/mt or 0.13% higher at RMB 55,150/mt, with trading volumes and positions decreasing by 46,944 lots and 1,072 lots, respectively. Nevertheless, trading volumes and positions for SHFE 1211 copper contract added by 448 lots and 10,652 lots, respectively, a sign the shift of the most active copper contract began. Longs and shorts held growing divergence ahead of China's GDP data release Friday with selling pressures increasing.  
  
As SHFE copper prices laced momentum to rebound, high-quality copper cargo-holders kept prices sticky and tried to increase premium quotes, but the market response was tepid. Standard-quality imported copper's supply was diversified and traded at premiums of positive RMB 0/mt. Mainstream spot copper offers were between premiums of positive RMB 0-80/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 55,400-55,480/mt, and RMB 55,450-55,550/mt for high-quality copper. A lot of participants in spot markets inquired prices as SHFE copper prices retreated, but actual market transactions were limited. In the afternoon, SHFE copper prices stabilized, but both spot copper offers and traded prices were little changed from the morning levels. 

Aluminum:
The most active SHFE aluminum contract for October delivery started lower at RMB 15,485/mt and closed down RMB 40/mt or 0.26% at RMB 15,470 on Thursday, following a narrow struggle near RMB 15,500/mt. Strong resistance at the 10-day moving average had kept the contract below RMB 15,500 for the day. Positions dropped 810 lots to 109,150 lots. Transacted contracts were on continual decline as trading turns light. The slightly bearish market sentiment means more resistance will be built at the RMB 15,500/mt mark. A test of support at RMB 15,400/mt should be the near-term trend.

Spot aluminum traded at RMB 15,520-15,550/mt in Shanghai, at discounts of RMB 50-80/mt over the current-month SHFE aluminum contract. Low-iron aluminum traded at RMB 15,600-15,620/mt. Spot aluminum prices did not drop much in the morning session as the current-month contract struggled and returned above RMB 15,600/mt. Most deals, however, were done with discounts near RMB 80/mt. Low-buying from downstream and middlemen helped spot aluminum prices stop falling at RMB 15,520/mt, but overall trading stayed light. Quotations were sparse and at RMB 15,520-15,530/mt in the afternoon, with deals hardly concluded as most sellers and buyers stood on the sidelines.

Lead:
SHFE lead prices opened slightly lower at RMB 14,850/mt Thursday and hovered around RMB 14,820/mt in the morning with market awaiting Friday's release of China's GDP for second quarter. In the afternoon, SHFE lead prices rose to RMB 14,880/mt boosted by rising Shanghai Stock Exchange Composite Index and ended the day at RMB 14,870/mt with resistance at the 5-day moving average. Trading volumes were down 30 lots to 66 lots, and positions were up 28 lots to 2,204 lots.

Spot lead prices edged down. Quotations for Nanfang were mainly at RMB 15,020/mt, with spot premiums over the most active SHFE lead price narrowing from RMB 200/mt to RMB 150/mt. Mengzi and Hanjiang were quoted at RMB 14,950/mt. In the afternoon, spot lead prices rose along with SHFE lead prices. Traders and smelters cut sales, believing the GDP released Friday may help lift the market, while downstream buying interest remained low, leaving transactions limited.

Zinc:
On Thursday, SHFE 1210 zinc contract prices opened lower at RMB 14,700/mt, and tumbled to an intraday low at RMB 14,550/mt as large numbers of short were selling off goods. As the Shanghai Composite Index stopped decreases and rebounded slightly, SHFE zinc prices pared some losses, and fluctuated between RMB 14,630-14,660/mt. Finally, SHFE 1210 zinc prices closed at RMB 14,645/mt. Trading volumes increased by 4,130 lots to 87,864 lots, and total position decreased by 1,806 lots to 171,214 lots.

In domestic spot markets, discounts of #0 zinc were around RMB 80/mt, with traded prices around RMB 14,490/mt. Some bold traders arbitraged while downstream buyers purchased actively. As SHFE zinc prices rose, discounts of #0 zinc expanded to RMB 90-100/mt, with traded prices between RMB 14,520-14,550/mt, with transactions limited at the high end of the price band. As prices inched up, the market turned cautious. #1 zinc was traded between RMB 14,470-14,480/mt.

Tin:
In Shanghai tin market, spot tin prices were mainly between RMB 147,500-149,000/mt Thursday. Inquiries were rarely seen and downstream buying interest remained weak. Low-end prices fell but trading was still thin, with traders reporting lower sales. Yunxi and Yunheng were mainly traded between RMB 147,500-148,000/mt, and a few goods for Nanshan and Jinlong were offered at RMB 147,000/mt. Quotations from Yunxi were relatively firm. Smelters in Jiangxi were still unwilling to move goods, leaving fewer goods flowing into the market. Deals were mainly made for Yunxi and Yunheng. Transactions remained weak and tin prices kept falling.

Nickel:
On Thursday, Jinchuan Group lowered nickel ex-work prices to RMB 119,000/mt, down RMB 3,000/mt. Mainstream prices of Jinchuan nickel were between RMB 120,000-120,300/mt in the morning session, while mainstream Russian nickel prices were between RMB 117,200-117,400/mt. Mainstream prices of Jinchuan nickel slid to RMB 119,700-119,800/mt at noon after the price adjustment, but demand for Jinchuan nickel was still sluggish, with transactions muted. Transactions of Russian nickel were better, but were mainly made among traders.


 

SMM Daily Review – 2012/7/12 Base Metals Market

Price Review & Forecast 10:59:26AM Jul 13, 2012 Source:SMM

SHANGHAI, Jul. 13 (SMM)--

Copper:
SHFE 1210 copper contract, the most active one, started RMB 110/mt up at RMB 55,290/mt Thursday. The contract dropped rapidly below RMB 55,000/mt to RMB 54,900/mt in the morning session as longs closed positions and then fluctuated weakly around this price mark. However, in the afternoon session, as the Shanghai Composite Index rallied from earlier lows, the contract began stabilizing and returned above the daily moving average, drifting gradually higher to around RMB 55,200/mt. Finally, SHFE 1210 copper contract settled RMB 70/mt or 0.13% higher at RMB 55,150/mt, with trading volumes and positions decreasing by 46,944 lots and 1,072 lots, respectively. Nevertheless, trading volumes and positions for SHFE 1211 copper contract added by 448 lots and 10,652 lots, respectively, a sign the shift of the most active copper contract began. Longs and shorts held growing divergence ahead of China's GDP data release Friday with selling pressures increasing.  
  
As SHFE copper prices laced momentum to rebound, high-quality copper cargo-holders kept prices sticky and tried to increase premium quotes, but the market response was tepid. Standard-quality imported copper's supply was diversified and traded at premiums of positive RMB 0/mt. Mainstream spot copper offers were between premiums of positive RMB 0-80/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 55,400-55,480/mt, and RMB 55,450-55,550/mt for high-quality copper. A lot of participants in spot markets inquired prices as SHFE copper prices retreated, but actual market transactions were limited. In the afternoon, SHFE copper prices stabilized, but both spot copper offers and traded prices were little changed from the morning levels. 

Aluminum:
The most active SHFE aluminum contract for October delivery started lower at RMB 15,485/mt and closed down RMB 40/mt or 0.26% at RMB 15,470 on Thursday, following a narrow struggle near RMB 15,500/mt. Strong resistance at the 10-day moving average had kept the contract below RMB 15,500 for the day. Positions dropped 810 lots to 109,150 lots. Transacted contracts were on continual decline as trading turns light. The slightly bearish market sentiment means more resistance will be built at the RMB 15,500/mt mark. A test of support at RMB 15,400/mt should be the near-term trend.

Spot aluminum traded at RMB 15,520-15,550/mt in Shanghai, at discounts of RMB 50-80/mt over the current-month SHFE aluminum contract. Low-iron aluminum traded at RMB 15,600-15,620/mt. Spot aluminum prices did not drop much in the morning session as the current-month contract struggled and returned above RMB 15,600/mt. Most deals, however, were done with discounts near RMB 80/mt. Low-buying from downstream and middlemen helped spot aluminum prices stop falling at RMB 15,520/mt, but overall trading stayed light. Quotations were sparse and at RMB 15,520-15,530/mt in the afternoon, with deals hardly concluded as most sellers and buyers stood on the sidelines.

Lead:
SHFE lead prices opened slightly lower at RMB 14,850/mt Thursday and hovered around RMB 14,820/mt in the morning with market awaiting Friday's release of China's GDP for second quarter. In the afternoon, SHFE lead prices rose to RMB 14,880/mt boosted by rising Shanghai Stock Exchange Composite Index and ended the day at RMB 14,870/mt with resistance at the 5-day moving average. Trading volumes were down 30 lots to 66 lots, and positions were up 28 lots to 2,204 lots.

Spot lead prices edged down. Quotations for Nanfang were mainly at RMB 15,020/mt, with spot premiums over the most active SHFE lead price narrowing from RMB 200/mt to RMB 150/mt. Mengzi and Hanjiang were quoted at RMB 14,950/mt. In the afternoon, spot lead prices rose along with SHFE lead prices. Traders and smelters cut sales, believing the GDP released Friday may help lift the market, while downstream buying interest remained low, leaving transactions limited.

Zinc:
On Thursday, SHFE 1210 zinc contract prices opened lower at RMB 14,700/mt, and tumbled to an intraday low at RMB 14,550/mt as large numbers of short were selling off goods. As the Shanghai Composite Index stopped decreases and rebounded slightly, SHFE zinc prices pared some losses, and fluctuated between RMB 14,630-14,660/mt. Finally, SHFE 1210 zinc prices closed at RMB 14,645/mt. Trading volumes increased by 4,130 lots to 87,864 lots, and total position decreased by 1,806 lots to 171,214 lots.

In domestic spot markets, discounts of #0 zinc were around RMB 80/mt, with traded prices around RMB 14,490/mt. Some bold traders arbitraged while downstream buyers purchased actively. As SHFE zinc prices rose, discounts of #0 zinc expanded to RMB 90-100/mt, with traded prices between RMB 14,520-14,550/mt, with transactions limited at the high end of the price band. As prices inched up, the market turned cautious. #1 zinc was traded between RMB 14,470-14,480/mt.

Tin:
In Shanghai tin market, spot tin prices were mainly between RMB 147,500-149,000/mt Thursday. Inquiries were rarely seen and downstream buying interest remained weak. Low-end prices fell but trading was still thin, with traders reporting lower sales. Yunxi and Yunheng were mainly traded between RMB 147,500-148,000/mt, and a few goods for Nanshan and Jinlong were offered at RMB 147,000/mt. Quotations from Yunxi were relatively firm. Smelters in Jiangxi were still unwilling to move goods, leaving fewer goods flowing into the market. Deals were mainly made for Yunxi and Yunheng. Transactions remained weak and tin prices kept falling.

Nickel:
On Thursday, Jinchuan Group lowered nickel ex-work prices to RMB 119,000/mt, down RMB 3,000/mt. Mainstream prices of Jinchuan nickel were between RMB 120,000-120,300/mt in the morning session, while mainstream Russian nickel prices were between RMB 117,200-117,400/mt. Mainstream prices of Jinchuan nickel slid to RMB 119,700-119,800/mt at noon after the price adjustment, but demand for Jinchuan nickel was still sluggish, with transactions muted. Transactions of Russian nickel were better, but were mainly made among traders.