SHANGHAI, Jan. 5 (SMM) –LME copper prices dropped after initially rising during the New Year holiday and closed at USD 8,149/mt Thursday. SHFE 1304 copper contract, the most active one, opened RMB 800/mt up at RMB 58,610/mt Friday, but then suffered short selling before slipping to RMB 58,320/mt. The contract later rose but still met upside pressure, hovering narrowly around RMB 58,310/mt after dipping again. SHFE 1304 copper contract settled RMB 550/mt or 0.95% higher at RMB 58,360/mt, with trading volumes and positions increasing by 17,834 lots and 10,614 lots, respectively. With severe struggle between longs and shorts, the yearly high levels may become key support for SHFE copper prices over the short term.
Shanghai spot copper discounts were largely between negative RMB 50-220/mt in the morning business. Traded prices for standard-quality copper were between RMB 57,400-57,500/mt, and RMB 57,520-57,650/mt for high-quality copper. SHFE copper prices retreated from the daily moving average during the first trading day of 2013 since LME copper gave up gains registered during the New Year holiday period. In this context, few spot copper cargo-holders chose to move goods and insisted on firm prices, helping copper discounts narrow. Merely a small number of downstream producers replenished stocks, while a few traders bought spot copper and sold SHFE copper contracts, leading to limited market transactions. In the afternoon, with SHFE copper prices inching up, spot copper discounts returned to negative RMB 100-200/mt. Low-end traded prices rose marginally but failed to break highs, mainly between RMB 57,450-57,650/mt in the afternoon, but market transactions were not seen to increase. Few cargo-holders chose to quote prices, while only a small number of traders took advantages to enter markets.