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.
SHFE 1303 aluminum contract prices briefly hit a high of RMB 15,420/mt after a high opening of RMB 15,395/mt on January 4, but later gave back earlier gains. Finally, the March aluminum on the SHFE ended the day down RMB 20/mt or 0.13% at RMB 15,315/mt. Positions were up 464 lots to 65,588 lots. LME aluminum fell back after hitting high, curbing gains of SHFE aluminum prices, which were stagnant due to short selling. The most active SHFE aluminum contract is expected to continue to test support at RMB 15,300/mt in the short term. Latest SHFE aluminum inventories increased by 4,641 mt to 446,936 mt.
Spot aluminum was mainly traded at RMB 15,060-15,080/mt in Shanghai on Friday, with discounts at RMB 50-70/mt. Low-iron aluminum was traded at RMB 15,110-15,130/mt. SHFE 1303 aluminum contract prices moved lower after a high opening on the first trading day of 2013, triggering strong wait-and-see sentiment in spot market. Cargo holders moved limited goods, helping aluminum prices stabilize at RMB 15,060/mt. Downstream producers showed little interest in stock replenishment, leaving trading light. In the afternoon, SHFE current-month aluminum contracts moved weakly. Traders held beck goods, with sparse quotations seen at RMB 15,080-15,090/mt. Only a few middlemen went bargain-hunting, but a lack of low-priced goods depressed overall trading.
The most active SHFE lead contract price opened RMB 50/mt higher at RMB 15,315/mt on Friday and fell quickly. Given the weak spot lead market, SHFE lead prices hovered between RMB 15,230-15,265/mt with support at the 5-day moving average, and finally closed at RMB 15,250/mt, down RMB 15/mt. Trading volumes were up 200 lots to 402 lots, and positions fell 54 lots to 2,388 lots.
On Friday, investors in China spot lead market were cautious, with quotations for Chihong Zn & Ge and Nanfang were between RMB 14,790-14,800/mt, with spot discounts of RMB 450/mt over the most active SHFE lead contract price, and Chengyuan was quoted at RMB 14,750/mt, while Dongling was mainly quoted at RMB 14,700/mt.
LME zinc prices overnight fell sharply after initially surging. SHFE three-month zinc contract prices started the day higher at RMB 15,540/mt, falling after touching RMB 15,620/mt in the morning trading, and then moving below the moving averages. The Shanghai Composite continued to rebound in the afternoon, and LME zinc prices pared some previous losses, but due to strong short momentum, SHFE three-month zinc contract prices lacked upward momentum, fluctuating around RMB 15,520/mt, and dipping to RMB 15,490/mt. Finally, SHFE three-month zinc contract prices finally closed at RMB 15,540/mt, up RMB 30/mt. Total position decreased by 10,556 lots to 81,138 lots.
SHFE zinc prices inched down after initially surging. Discounts of #0 zinc against SHFE three-month zinc contract prices were between RMB 300-320/mt, with traded prices between RMB 15,220-15,250/mt. #1 zinc prices were RMB 15,170-15,180/mt. Smelters still lacked interest to move goods, with prices for some major brands firm. Some arbitrage traders released goods modestly due to narrowing spot discounts, but downstream buying interest was low, keeping overall transactions muted.
In Shanghai tin market, spot tin prices moved up to RMB 154,500-157,000/mt on Friday due to the increase in LME tin prices during the New Year holiday, with trading modest. Transactions for Yunxi and Yunheng were concluded at RMB 156,000-157,000/mt, while Yunxiang and Nanshan were traded at RMB 155,000/mt. Despite the improving market confidence, price increase was limited due to a lack of buying support.
Jinchuan Group raised ex-works nickel prices by RMB 1,000/mt to RMB 120,000/mt on Friday.In the Shanghai nickel spot market, mainstream traded prices of nickel from Jinchuan Group were between RMB 121,900-120,000/mt, and mainstream traded prices of nickel from Russia were between RMB 120,900-121,000/mt. During the fist trading day after new year holiday, downstream purchasing interest was low. However, transactions between traders were relatively brisk due to arbitrage opportunity.