SHANGHAI, Jul. 30 (SMM) – As LME copper prices pared declines overnight, SHFE 1211 copper contract, the most active one, started slightly RMB 300/mt up at RMB 54,390/mt last Friday. After the opening, a weak US dollar helped LME copper return above USD 7,500/mt, and caused SHFE copper prices to move higher after a high open amid position closings by shorts. However, the Shanghai Composite Index hit a new three-year low and gave a heavy pressure to SHFE copper prices which climbed slower than LME copper, touching an intraday high at RMB 54,800/mt in the afternoon. SHFE 1211 copper contract ended the day RMB 680/mt or 1.26% higher at RMB 54,770/mt, with trading volumes adding by 7,154 lots but positions decreasing by 9,804 lots. Total trading volumes and positions fell by 8,942 lots and 15,908 lots, respectively. Shorts left markets, but longs were wary of keeping up with rising prices.
SHFE copper prices trended higher after starting up, so hedged copper was restricted, causing spot copper supply to decrease. Spot copper premium quotes thus held firm between positive RMB 80-150/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 54,820-54,980/mt, and RMB 54,850-55,050/mt for high-quality copper, which, however, were largely resisted by market buyers. Some traders chose to buy spot copper and sell copper futures contracts, while downstream producers continued to buy as needed, keeping overall market transactions limited in the morning. In the afternoon, as SHFE copper prices continued to climb, spot copper premium quotes narrowed slightly, mainly between positive RMB 120-150/mt. Price quotations for standard-quality copper in the afternoon remained little changed with the morning levels in the face of limited supply, and narrowed its price gap with high-quality copper. Traded prices in the afternoon stood completely above RMB 55,000/mt, but market activity remained sluggish. SHFE copper stocks were reported to decreased by 4,463 mt last Friday, an indication downstream producers opted to replenish stocks when copper prices slumped, which can provide support for copper prices.