SHANGHAI, Jan. 17 (SMM) – With LME copper prices losing USD 8,000/mt overnight, SHFE 1304 copper contract, the most active one, started RMB 140/mt down at RMB 57,890/mt Wednesday. The contract continued hovering narrowly following the opening and rose above RMB 58,000/mt amid position closings, but suffered resistance at RMB 58,150/mt due to severe struggle below long and short investors. In the afternoon, as Chinese A-share markets dived, SHFE copper prices slipped rapidly and touched a low of RMB 57,770/mt. Recouping some of declines, SHFE 1304 copper contract settled at RMB 57,940/mt, still down RMB 90/mt or 0.16%, with trading volumes and positions decreasing 31,474 lots and 11,270 lots, respectively. With great pressure at RMB 58,300/mt but strong support at RMB 57,800/mt, SHFE copper prices will fluctuate near current levels for the near future.
As SHFE copper prices rose after initially falling, spot copper discounts returned following deliveries for SHFE 1301 copper contracts. Shanghai spot copper discounts were between negative RMB 160-250/mt in the morning business. Traded prices for standard-quality copper were between RMB 57,450-57,500/mt, and RMB 57,500-57,550/mt for high-quality copper. However, cargo-holders became pessimistic over future copper prices and thus stepped up sale volumes, with high-quality copper dominating market supply. The supply of standard-quality copper was limited and helped cargo-holders insist on firm prices. Both traders and downstream producers stood on the sidelines, resulting in market oversupply. In the afternoon, with supply of copper, especially high-quality goods, decreasing, copper discounts narrowed marginally to negative RMB 160-230/mt, while traded prices dropped to RMB 57,380-57,470/mt.