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SMM Daily Review – 2012/7/18 Copper Market
Jul 19,2012 09:20CST
price review forecast
1210 copper contract finally ended RMB 300/mt or 0.53% lower at RMB 55,820/mt Wednesday. Spot copper premiums were positive RMB 20-120/mt in the morning business.

SHANGHAI, Jul. 19 (SMM) – As LME copper dropped overnight, SHFE 1210 copper contract started RMB 120/mt down at RMB 56,000/mt Wednesday. After the opening, the contract fell all the way as a climbing US dollar pressured down LME copper and as selling pressures for forward SHFE copper contracts grew. In the afternoon, as the Shanghai Composite Index gathered falling momentum and hit another half-year low, the contract fell to a low at RMB 55,540/mt and only eased the falling momentum after dropping to around the 60-day moving average. SHFE 1210 copper contract followed LME copper to pare some of earlier losses at the tail of trading before finally ending RMB 300/mt or 0.53% lower at RMB 55,820/mt. SHFE 1211 copper contract touched a high at RMB 56,100/mt and a low at RMB 55,500/mt during the day, and finally settled at RMB 55,760/mt, down RMB 390/mt or 0.69%. Trading volumes and positions for SHFE 1210 copper contract decreased by 64,062 lots and 13,086 lots, respectively. Positions for 1211 copper contract added by 15,102 lots, but trading volumes fell by 1,458 lots, highlighting that the shift of the most active copper contract was completed. With pressures for forward SHFE copper contracts piling up and technical indicators pointing downside again, SHFE copper prices will test the support at the 5-day moving average of RMB 55,800/mt repeatedly in the near future.

As SHFE copper prices remained weak, spot copper premiums rose to around positive RMB 100/mt. The SHFE/LME copper price ratio still lacked momentum to increase and propelled cargo-holders to raise premiums, which, however, were unable to mover high owing to both diversified and sufficient supply. Market participant resisted high prices and capped the rising trend. Mainstream spot copper offers were between premiums of positive RMB 20-120/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 55,800-55,940/mt, and RMB 55,850-56,000/mt for high-quality copper. Copper prices met resistance to trend higher several times. Downstream producers continued buying as needed, while traders still bought spot copper and sold SHFE copper contracts. Market surpluses were still pronounced in the morning. In the afternoon, SHFE copper prices drifted lower again and helped spot copper premiums increase to between positive RMB 40-150/mt, while traded prices entirely lost RMB 56,000/mt. Some companies bought at the lows in the afternoon, and market activity improved from the morning.

SHFE copper price
Shanghai spot copper

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