SHANGHAI, Jul. 20 (SMM) – As LME copper rallied from initial lows overnight, SHFE 1211 copper contract started RMB 330/mt up at RMB 56,080/mt Thursday. After the opening, the contract edged down to RMB 56,000/mt and then fluctuated around this price point, testing a low at RMB 55,830/mt, the bottom of recent pricing range. In the afternoon however, LME copper returned above USD 7,700/mt, while the Shanghai Composite Index rose to nearly 2,200, both helping the contract increase rapidly and drift higher to RMB 56,250/mt, with a high touching RMB 56,310/mt. SHFE 1211 copper contract ended the day at RMB 56,230/mt, up RMB 480/mt or 0.86%, with trading volumes decreasing by 10,754 lots but positions increasing by 10,784 lots. As technical indicators pointed upward, SHFE copper prices stood above all moving averages and helped weaken bearish sentiment in markets.
SHFE copper prices met resistance to rebound and compelled cargo-holders in spot markets to sell for cash, keeping market supply sufficient. Spot copper offers were between premiums of positive RMB 20-100/mt in the morning business. Traded prices for standard-quality copper were between RMB 55,950-56,030/mt, and RMB 56,000-56,100/mt for high-quality copper. As there was no price gap among SHFE copper contracts, trader buying interest was restricted. Downstream producers, however, continued buying as needed, leading to modest market transactions in the morning. In the afternoon, inasmuch as SHFE copper prices rose rapidly, some hedged copper was locked, but spot copper premium quotes held to the morning levels. Traded prices climbed to RMB 56,150-56,250/mt in the afternoon, but market activity became muted as market participants generally took a on-the-fence posture following considerable copper price rebounds.