SHANGHAI, Oct. 17 (SMM) – As LME copper prices rebounded slightly overnight, SHFE 1301 copper contract, the most active one, started marginally RMB 250/mt up at RMB 58,700/mt Tuesday. Following the opening, the contract hovered narrowly around RMB 58,750/mt and touched a low at only RMB 58,650/mt. SHFE copper prices drifted around RMB 80/mt higher in the afternoon before reaching a high at RMB 58,890/mt, and rallied again after diving slightly at the tail of trading. SHFE 1301 copper contract settled RMB 340/mt or 0.58% higher at RMB 58,790/mt, with trading volumes and positions down by 40,288 lots and 4,328 lots, respectively. The drop in positions tended to speed up, and there were clear signs the most active copper contract began shifting. As longs and shorts struggled severely, SHFE copper prices suffered great upside pressure at moving averages.
Mainstream spot copper discounts were negative RMB 30-170/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 58,620-58,700/mt, and RMB 58,700-58,800/mt for high-quality copper. As SHFE copper prices rebounded, and as SHFE 1210 copper contracts were delivered, spot copper discounts returned. Speculators were eager to move goods and kept spot copper supply sufficient. Near the midday, as copper prices rose, buying interest became lower and spot copper discounts continued expanding. The price differential between standard and high-quality copper widened. Traders became somehow unwilling to enter markets, while downstream producers mostly stood on the sidelines, restricting market activity. In the afternoon, as copper futures prices climbed further, some traders holding hedged copper cannot conduct operations and only stood on the sidelines, while other cargo-holders expanded discounts for high-quality copper to negative RMB 100/mt, and negative RMB 200/mt for standard-quality copper. Traded prices rose to RMB 58,700-58,850/mt in the afternoon but received little response from markets, and discounts were not large enough to attract speculators, keeping market activity muted.