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SMM Copper Market Daily Review (2012-10-12)
Oct 15,2012 09:28CST
price review forecast
SHFE 1301 copper contract ended at RMB 58,980/mt, still up RMB 120/mt or 0.2% last Friday, and SHFE copper stocks increased rapidly by 18,967 mt to 181,514 mt.

SHANGHAI, Oct. 15 (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 last 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 total 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 were trying to shake off resistance at recent moving averages, and bottom prices will increase once standing three recent moving averages.

SHFE copper prices fell after initially rising, but spot copper supply was stable. Spot copper discounts were mainly negative RMB 20-220/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 58,980-59,120/mt, and RMB 59,100-59,320/mt for high-quality copper. Some traders bought spot copper and sold SHFE copper contracts, and the price gap between standard and high-quality copper was still relatively high. High-quality copper cargo-holders became unwilling to move goods near the midday when copper prices dipped rapidly, while standard-quality copper cargo-holders had no intention of narrowing discounts but remained willing to sell, widening their price gap further. Downstream producers continued sourcing to order, but overall market transactions increased first and then fell. In the afternoon, as SHFE copper prices fell, mainstream copper discounts narrowed marginally to negative RMB 10-160/mt, while traded prices were between RMB 58,850-59,150/mt. Downstream producers were cautious towards operations and only bought at the lows in the afternoon, so overall market transactions were limited. SHFE copper stocks increased rapidly by 18,967 mt to 181,514 mt last Friday as the holiday factor caused stocks to rise.


SHFE copper prices
SHFE copper stocks

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