SHANGHAI, Sept.5 (SMM) --

Copper

As LME copper prices fluctuated at the highs overnight, SHFE 1212 copper contract, the most active one, started RMB 360/mt up at RMB 56,320/mt Tuesday. The contract lost high levels immediately following the opening amid large scale position closings, and retreated rapidly to around RMB 56,000/mt, with a high only reaching RMB 56,390/mt and coming under great pressure at the daily moving average. In the afternoon, as the Shanghai Composite Index gained falling momentum, SHFE copper prices dropped to as low as RMB 55,840/mt. But SHFE 1212 copper contract still ended RMB 60/mt or 0.11% higher at RMB 56,020/mt, with trading volumes and positions down by 106,000 lots and 29,164 lots, respectively. More investors chose to conduct profit-taking at the highs, so SHFE copper prices need to get more momentum to break through RMB 56,400/mt. 

SHFE copper prices extended rebounds but were volatile. An increasing number of market participants chose to buy at lower price levels in spot copper markets, resulting in tight supply and firm price quotations. This was especially true of standard-quality copper, which traded at discounts in the morning but then turned into negative RMB 0/mt and even slight premiums near the midday. Mainstream spot copper offers were between discounts of negative RMB 10/mt and premiums of positive RMB 50/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 56,380-56,440/mt, and RMB 56,420-56,500/mt for high-quality copper. Investor optimism over future copper prices helped enliven market activity in the morning. In the afternoon, spot copper supply remained limited, so copper premiums were little changed from the morning levels. Traded prices fell to RMB 56,350-56,450/mt in the afternoon, but market activity was less active than the morning.

Aluminum

The most active SHFE 1212 aluminum contract gapped higher at RMB 15,480/mt on September 4. The three-month contract broke through the 60-day moving average to a high of RMB 15,500/mt, the highest since July 23 at the tail of trading. Finally, the contract for December delivery gained RMB 90/mt or 0.58% to close at RMB 15,485/mt. Positions were up 1,090 lots to 88,992 lots. The most active contract will extend gains due to high expectations for easing policies in China. However, as investors are staying guarded, the SHFE 1212 aluminum contract is expected to continue to struggle at RMB 15,400/mt in the short term.

Spot aluminum was mainly traded between RMB 15,370-15,390/mt in Shanghai on September 4, with discounts between RMB 100-80/mt. Low-iron aluminum was traded near 15,460/mt. The most active contract was trapped within a tight range after a high open. The absence of buying at highs due to weak fundamentals caused spot discounts to expand to RMB 100/mt. Middlemen were aggressively purchasing low-priced deliverable goods ahead of the imminent delivery date, but some deliverable goods were firm at RMB 15,400/mt, though. As the current-month contract rose slower than forward contracts, many traders were eager to move goods, with quotations between RMB 15,370-15,380/mt. Inquiries were rarely heard, leaving overall trading light.

Lead

On Tuesday, SHFE lead prices fell to RMB 15,230/mt soon after opening at RMB 15,260/mt. In the afternoon, SHFE lead edged up to move around RMB 15,250/mt as LME lead prices fluctuated upward, with prices finally closing at RMB 15,270/mt, up RMB 70/mt. Trading volumes rose 82 lots to 286 lots, while positions fell 220 lots to 1,630 lots.

SHFE lead prices fell soon after opening higher and moved around RMB 15,235/mt on September 4. In China’s spot lead market, Nanfang was mainly quoted at RMB 15,170/mt, with spot discounts over the most active SHFE lead price expanding to RMB 60/mt. Quotations for Chihong Zn & Ge were RMB 15,200/mt, with spot discounts over the most active SHFE lead price at RMB 30/mt. Quotations for Dongling and Hexing were at RMB 15,120-15,130/mt, and Shenqian was quoted at RMB 15,100/mt. Trading was modest due to the weak demand.

Zinc

On Tuesday, SHFE 1212 zinc contract prices opened slightly higher at RMB 14,885/mt, and plummeted after touching RMB 14,900/mt as large numbers of shorts sold off goods, moving between RMB 14,810-14,840/mt during the day. As the Shanghai Composite Index fell in the afternoon, SHFE 1212 zinc contract prices dipped to RMB 14,795/mt. Finally, SHFE 1212 zinc contract prices closed at RMB 14,850/mt, up RMB 85/mt or 0.58%. Trading volumes decreased by 34,103 lots to 68,198 lots, and total position decreased by 5,836 lots to 161,184 lots.

In domestic spot markets, discounts of #0 zinc against SHFE three-month zinc contract prices were RMB 100/mt, with traded prices between RMB 14,730-14,740/mt. As SHFE zinc prices fell later, discounts of #0 zinc against SHFE three-month zinc contract prices narrowed to RMB 80-90/mt, with traded prices between RMB 14,700-14,730/mt. #1 zinc prices were around RMB 14,680/mt. Smelters were actively moving goods at higher prices, but downstream buyers remained cautious. Discounts of #0 zinc narrowed to RMB 70-80/mt as SHFE zinc prices slid in the afternoon, with traded prices were between RMB 14,690-14,710/mt, with transactions muted.  

Tin

On Tuesday, mainstream traded prices in Shanghai spot tin market were between RMB 148,000-151,000/mt, and transactions were limited since downstream buyers were still on the sidelines and consumption remained soft. In the afternoon, trading was even quieter. Most traders only reported a few transactions in the morning, and quotations were rarely seen before closing due to depressed trading. Deals for Yunxi were mainly made at RMB 149,000/mt, while Yunxi was traded at RMB 148,500/mt. Jinlong and some imported goods were traded at RMB 148,000/mt.

Nickel

In the Shanghai nickel spot market, spot nickel prices advanced all the way along with LME nickel price hike. Mainstream traded prices of nickel from Jinchuan Group were in the RMB 115,000-115,200/mt range, and mainstream traded prices of nickel from Russia were in the RMB 113,600-113,800/mt range. Some downstream producers began to replenish stocks in a small amount as price hike boosted bullish sentiment, slightly increasing transactions.