SMM Brief on SHFE Copper Prices (2012-11-23)

SHANGHAI, Nov. 23 (SMM) – With LME copper still lacking directions overnight, SHFE 1302 copper contract opened slightly RMB 30/mt down at RMB 56,030/mt Friday. The contract slipped to a low of RMB 55,590/mt amid short selling but returned to high levels in the afternoon after the Shanghai Composite Index increased, and since shorts left the market. SHFE 1302 copper contract ended at a recent high of RMB 56,140/mt, up RMB 80/mt or 0.14%. SHFE 1303 copper contract also rallied after initially falling and closed RMB 50/mt or 0.09% higher at RMB 56,090/mt, with an intraday low at RMB 55,560/mt and high at RMB 56,140/mt. Trading volumes and positions for SHFE 1303 copper contract added by 132,000 lots and 31,500 lots, respectively, indicating that the shift of the most active copper contract was completed. There was barely speculative room since the price gap among SHFE copper contracts was extremely limited, but new positions were mostly short positions during the day. SMM believes that SHFE copper prices will continue to suffer selling pressures in the coming week.