SHANGHAI, Dec. 27 (SMM) --

Copper

LME copper market resumed trading and opened higher Thursday. SHFE 1304 copper contract, the most active one, also opened RMB 160/mt up at RMB 57,320/mt. LME copper prices were boosted and rose rapidly to USD 7,900/mt following the opening by positive profit data at Chinese industrial enterprises, helping SHFE copper advance to RMB 57,730/mt before suffering resistance at the 20-day moving average and moving narrowly around the daily moving average. As Chinese stock markets dropped after initially rising, SHFE copper prices came under pressure at the daily moving average. SHFE 1304 copper contract closed RMB 390/mt or 0.68% higher at RMB 57,550/mt, with trading volumes up 85,514 lots but positions down 11,230 lots. More investors chose to close positions during the whole trading day. With pressure at the 20-day moving average, SHFE copper prices will post repeated trends for the near future.

With SHFE copper prices extending rebounds, spot copper discounts expanded to negative RMB 350-450/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 56,650-56,750/mt, and RMB 56,730-56,850/mt for high-quality copper. Traders with enough credit chose to buy high-quality copper at large discounts. Imported hydro-copper supply increased following improvement in the SHFE/LME copper price ratio, but overall market activity remained muted in the morning as downstream producers mostly stayed out of markets. In the afternoon, SHFE copper prices fell slightly, but spot copper discounts widened further to negative RMB 350-470/mt, while traded prices were RMB 56,600-56,750/mt. Some traders continued entering markets in the afternoon, but market activity became more lackluster than morning levels.

Aluminum

SHFE 1303 aluminum contract prices opened at RMB 15,305/mt on December 27. The most active contract broke through the 10-day moving average in early morning session, but later stalled at RMB 15,350/mt. Trading volumes increased to 11,898 lots. Finally, the March aluminum on the SHFE gained RMB 45/mt or 0.29% at RMB 15,350/mt. Positions were down 142 lots to 64,146 lots. LME aluminum tested support at USD 2,100/mt, helping SHFE aluminum stabilize at RMB 15,300/mt. However, buying at highs by the longs will be limited ahead of the New Year holiday, so the SHFE 1303 aluminum contract is expected to consolidate support at RMB 15,300/mt in the short term.

Spot aluminum was mainly traded at RMB 15,040-15,060/mt in Shanghai on Thursday, with discounts between RMB 60-80/mt. Low-iron aluminum was traded at RMB 15,090-15,110/mt. SHFE aluminum prices edged up, pushing spot aluminum prices up. Traders reduced supplies and held offers firm at RMB 15,050/mt, while downstream producers limited amounts as needed, leaving overall trading quiet. In the afternoon, deals were rarely done in spot aluminum market. Traders have kept inventories low at year-end, while downstream producers have almost finished restocking, leaving trading increasingly quiet.

Lead

The 1302 SHFE lead contract price opened at RMB 15,275/mt on December 27 and remained under resistance at the 10-day moving average. Investors were still on the sidelines given market concerns over the US fiscal cliff. Despite the slight increase in LME lead prices, SHFE lead prices fluctuated narrowly and closed at RMB 15,240/mt. Trading volumes were up 16 lots to 174 lots, and positions dropped 60 lots to 2,290 lots.

Spot lead prices in China remained little changed from Wednesday. Quotations were less reported as traders preferred to watch on the sidelines by year’s end. Chihong Zn & Ge was mainly quoted at RMB 14,800-14,810/mt, with spot discounts of RMB 450/mt over the most active SHFE lead contract price, but transactions were sparse. Mainstream offers for Nanfang were around RMB 14,750/mt. Goods from Gejiu were quoted at RMB 14,630/mt. Downstream buyers only purchased as needed with trading still weak.

Zinc

SHFE three-month zinc contract prices started the day at RMB 15,525/mt, above the 10-day moving average, and rising along with LME zinc prices in the morning trading. Net profits at domestic scale-efficiency industrial enterprises from January through November totaled RMB 4.6625 trillion, up 3% YoY, and net profits in November were RMB 638.5 billion, up 22.8% YoY. As a result, SHFE three-month zinc contract prices touched a one-week high of RMB 15,600/mt, but reserved increases at noon as short momentum mounted. In the afternoon, SHFE three-month zinc contract prices generally moved marginally between RMB 15,555-15,575/mt, and finally closed at RMB 15,585/mt, up RMB 90/mt. Total position decreased by 376 lots to 115,312 lots.

SHFE zinc prices gained ground in the morning trading. Discounts of #0 zinc against SHFE three-month zinc contract prices were between RMB 380-400/mt, with traded prices between RMB 15,180-15,190/mt. As SHFE zinc prices fell later in the day, #0 zinc prices inched down to RMB 15,150-15,180/mt. #1 zinc prices were RMB 15,140-15,160/mt. Some smelters were held onto some brands, causing goods supply to decrease, while some traders were buying spot goods in the morning. But downstream buyers showed little interest in buying goods, keeping overall transactions muted.

Tin

In Shanghai tin market, spot tin prices were mainly between RMB 150,500-152,000/mt on December 27, with low-priced goods less seen. In the morning, a few goods were quoted around RMB 150,000/mt, but traded prices were above RMB 150,500/mt in the afternoon. The production suspension at Yunxi and rising LME tin prices drove up spot tin prices, combined with replenishments by downstream enterprises prior to the New Year holiday, trading improved slightly. The firm quotations from Yunxi also gave support to tin prices.

Nickel

In the Shanghai nickel spot market, mainstream traded prices of nickel from Jinchuan Group were in the RMB 119,600-119,800/mt range, and mainstream traded prices of nickel from Russia were in the RMB 118,500-118,800/mt range. Traders kept offers firm as LME nickel prices inched higher after opening. Offers of nickel from Jinchuan Group rose to above RMB 120,000/mt and Russian nickel also climbed to RM 119,000/mt. However, downstream price acceptance was low.