SHANGHAI, Jan. 23 (SMM) – With LME copper moving within tight ranges overnight, SHFE 1304 copper contracts opened RMB 20/mt higher at RMB 58,280/mt on January 22. After the opening, surging sales volumes pushed prices of SHFE forward-month copper contracts up. LME copper broke through USD 8,100/mt after the Bank of Japan announced its latest resolution at midday, helping SHFE copper jump above RMB 58,500/mt. However, SHFE copper met resistance after climbing to RMB 58,780/mt in the afternoon, and finally ended the day up RMB 430/mt or 0.74% at RMB 58,690/mt. Trading volumes were up 40,354 lots, but positions were down 8,006 lots for SHFE 1304 copper contracts. Trading volumes and positions for SHFE 1305 copper contracts increased 101,000 lots and 35,500 lots, respectively. SHFE 1305 copper contracts will become the most active one tomorrow. SHFE copper prices climbed to all moving averages again, with strong support at RMB 58,000/mt. SHFE copper will probably stage a strong rally as buying increased from earlier.
SHFE copper shot up after a high opening, prompting cargo holders to cash in at higher prices. Most of the sellers were those who bought at lower prices in recent days. Spot copper supply increased and copper discounts were stable in the morning session. Both LME and SHFE copper rose all the way up during the second session, causing spot discounts to expand to RMB 120-240/mt. Traded prices were RMB 57,820-57,980/mt for standard-quality copper, and RMB 57,920-58,080/mt for high-quality copper. More middlemen entered the market for arbitrage and downstream producers were also active in buying out of their growing optimism towards future prices, greatly improving overall trading. In the afternoon, SHFE copper rose further, causing spot discounts to grow to RMB 140-250/mt. Traded prices rose slightly to RMB 57,900-58,100/mt and bullish sentiment dominated the market.