SHANGHAI, Jul. 27 (SMM) --
SHFE 1211 copper contract, the most active one, started slightly RMB 40/mt down at RMB 54,150/mt Thursday. After the opening, as both shorts and longs were wary of operations, the contract fluctuated weakly around the opening price, with a low at RMB 53,850/mt. In the afternoon, LME copper prices rallied from lows and helped the contract reverse earlier losses amid position closings by shorts, drifting marginally higher to around the previous session’s settlement price RMB 54,170/mt and touching a high at RMB 54,360/mt. However, the Shanghai Composite Index again hit a new low at 2,124 at the tail of trading, restricting SHFE copper prices which were unable to rally. But SHFE 1211 copper contract still ended RMB 20/mt or 0.04% higher at RMB 54,190/mt, with trading volumes and positions decreasing by 37,546 lots and 1,534 lots, respectively. Trading volumes and positions for SHFE 1212 copper contract added by 15,222 lots and 13,064 lots, respectively, with positions up to over 12,000 lots during the day. Selling pressures for forward SHFE copper contracts grew and longs and shorts held divergent views at RMB 54,000/mt, so SHFE copper prices will likely test this price point for the near future.
SHFE copper prices fluctuated weakly with the price gap among all SHFE copper contracts narrowing. The SHFE/LME copper price ratio fell considerably, but spot copper cargo-holders still stepped up sale volumes owing to growing bearish sentiment. This kept spot copper supply sufficient. Spot copper premium quotes were positive RMB 80-150/mt in the morning business. Traded prices for standard-quality copper were between RMB 54,620-54,680/mt, and RMB 54,680-54,750/mt for high-quality copper. Some traders chose to enter markets at the lows, while downstream producers continued buying as needed. Overall market transactions remained limited in the morning, though. In the afternoon, SHFE copper prices rallied from previous lows, but spot copper premium quotes stabilized, while traded prices widened slightly to RMB 54,600-54,800/mt. Investors were still unsure about the direction of future copper prices, so there were barely market transactions in the afternoon.
The most active SHFE aluminum contract for November delivery started slightly higher at RMB 15,290/mt and climbed further to struggle near RMB 15,330/mt before closing up RMB 80/mt or 0.52% at RMB 15,330/mt on Thursday. Aluminum was the best performer among base metals on the Shanghai Futures Exchange during the day. Positions added 3,992 lots to 96,830 lots. The Shanghai Composite Index has seen successive days of drops due to weak investor confidence. As longs and shorts remain somewhat balanced, which means a lack of momentum for any breakthrough, SMM expects the contract to struggle at RMB 15,300/mt for the near term.
Spot aluminum traded at RMB 15,370-15,390/mt in Shanghai, at discounts of RMB 20-40/mt over current-month SHFE aluminum prices. Low-iron aluminum traded at RMB 15,420-15,440/mt. In the morning, SHFE aluminum led gains of base metals but trimmed gains later. Spot aluminum traders showed strong selling interest but weak buying eroded the upside space of spot prices. Most deals were done near RMB 15,380/mt and trading volumes dropped slightly from Wednesday. In the afternoon, the current-month SHFE aluminum contract stagnated. Most sellers and buyers stood on the sidelines partly due to financial settlements at month’s end, with only sparse quotations at RMB 15,370-15,390/mt being heard and a few deals done. Trading was extremely light.
SHFE lead prices opened slightly higher at RMB 14,853/mt and inched up July 26 due to the positive news that ESM may obtain banking license. However, SHFE lead prices came under resistance at the 5-day moving average and only moved weakly around RMB 14,780/mt, and ended the day at RMB 14,790/mt after dipping to a low of RMB 14,705/mt influenced by the decline in Shanghai Stock Exchange Composite Index. Trading volumes were down 68 lots to 204 lots, while positions increased 54 lots to 2,792 lots.
SHFE lead prices remained stable July 25. With more goods supplied from warehouses, spot lead prices were lowered. Nanfang and Shuikoushan were quoted at RMB 14,930/mt, with spot premiums over the most active SHFE lead price at RMB 150/mt. Quotations for Shenqian and Mengzi were at RMB 14,910-14,920/mt, and offers from Yubei were mainly around RMB 14,920/mt, with premiums over the SHFE 1209 lead contract price at RMB 90/mt. Jinli sold goods in large amounts on Thursday with prices mainly around RMB 14,880/mt. Trading improved from the previous trading day.
On Thursday, SHFE 1211 zinc contract prices opened at RMB 14,460/mt and fell slightly to touch an intraday low at RMB 14,420/mt, then fluctuated between RMB 14,440-14,460/mt. In the afternoon, SHFE 1211 zinc contract prices plummeted and then rallied to touch RMB 14,495/mt, and finally closed at RMB 14,470/mt, up RMB 20/mt or 0.14%. Trading volumes decreased by 52,506 lots to 68,428 lots, and total position decreased by 3,622 lots to 166,818 lots.
In domestic spot markets, discounts of #0 zinc were between RMB 30-40/mt in the morning session, with traded prices between RMB 14,420-14,450/mt, but transactions limited at the low end of price range. Imported zinc was traded between RMB 14,370-14,380/mt, and #1 zinc was traded between RMB 14,370-14,380/mt. Inquiries from downstream buyers were brisk, but purchasing was limited. Transactions were mainly made among traders.
In Shanghai tin market, spot tin prices were between RMB 143,000-145,000/mt on July 26 and transactions remained unimproved with inquiries rarely seen. LME tin prices continued falling, and spot tin market was still dominated by a wait-and-see sentiment. Smelters still limited supply. Yunheng and Yunxi were traded between RMB 143,000-143,500/mt, and traded prices for Jinlong were around RMB 142,000/mt. Quotations from Yunxi were still firm at RMB 145,000/mt.
On Thursday, mainstream prices of Jinchuan nickel were between RMB 115,700-115,900/mt in the morning session, while mainstream Russian nickel prices were between RMB 113,400-113,600/mt. Some traders chose to purchase spot goods due to higher prices of SHFE nickel prices, so transactions were actively made among traders despite quiet inquiries from downstream buyers. Traders did not trade on the SHFE market raised quotes slightly, with mainstream Russian nickel prices up to RMB 113,800/mt, and Jinchuan nickel prices up to RMB 116,000/mt.