SMM Brief on SHFE Copper Prices (2012-10-12)

SHANGHAI, Oct. 12 (SMM) – As LME copper prices rallied from lows overnight, SHFE 1301 copper contract, the most active one, started RMB 340/mt up at RMB 59,200/mt Friday. Following the opening, SHFE copper prices followed LME copper to extend rebounds but then met resistance after reaching RMB 59,420/mt. As short-term selling appeared, and as the Shanghai Composite Index fell and tested 2,100, SHFE copper prices retreated gradually and dipped below RMB 59,000/mt to RMB 58,910/mt in the afternoon. SHFE 1301 copper contract ended at RMB 58,980/mt, still up RMB 120/mt or 0.2%, with trading volumes up 88,526 lots but positions down 4,820 lots. As of Friday, total trading volumes for all SHFE copper contracts added by over 280,000 lots, and positions increased by around 20,000 lots. Increases in positions were mostly built by short-term longs for forward copper contracts, an indication of effective support at the lows and optimism towards future copper prices. SHFE copper prices are trying to shake off resistance at recent moving averages, and bottom prices will increase once standing three recent moving averages.