SHANGHAI, Feb. 4 (SMM) – With LME copper giving up gains overnight, the most active SHFE 1305 copper contract opened slightly RMB 90/mt down at RMB 59,480/mt last Friday. China's official PMI came in softer than anticipated, but HSBC China manufacturing PMI rose to a fresh 2-year high. In this context, SHFE copper prices slipped following the opening and tested a low at RMB 59,310/mt. But in the afternoon, with the Shanghai Composite Index rebounding by 1.5% to 2,400, SHFE copper prices pared some of declines and touched an intraday high of RMB 59,680/mt after stabilizing above the daily moving average. SHFE 1305 copper contract settled RMB 100/mt or 0.17% higher at RMB 58,660/mt, with trading volumes down 22,420 lots but positions up 2,360 lots. Long investors became cautious towards keeping up with rising prices while markets awaited the US non-farm payrolls report. Once LME copper prices break upside pressures, SHFE copper prices will challenge new highs.

As China's official PMI came in softer than expected, SHFE copper prices fell slightly, which helped copper discounts shrank marginally to negative RMB 130-250/mt in the morning business. Traded prices for standard-quality copper were between RMB 58,520-58,600/mt, and RMB 58,620-58,700/mt for high-quality copper. Cargo-holders continued moving goods, while downstream producers stepped up purchases following copper price drops. Market transactions thus improved but were still limited in the morning. In the afternoon, SHFE copper prices rebounded, but most spot copper cargo-holders opted to leave markets, leading copper supply to decrease. Spot copper discount quotes, though, remained basically unchanged from morning levels, but traded prices surged to RMB 58,650-58,750/mt. However, market activity remained muted in the afternoon. SHFE copper stocks dropped 8029 mt to 197,091 mt last Friday, reflecting that fact that downstream producers replenished stocks at lows ahead of the Chinese New Year holiday.