SHANGHAI, Feb. 22 (SMM) –As LME copper lost USD 8,000/mt overnight, SHFE 1305 copper contract, the most active one, opened RMB 690/mt down at RMB 58,080/mt Thursday. The contract extended losses following the opening and slipped all the way amid growing selling pressures for forward contracts, with a high at merely RMB 58,050/mt. In the afternoon, with LME copper losing USD 7,900/mt and the Shanghai Composite Index retreating to around 2,300, SHFE copper prices were sent to a low of RMB 57,220/mt, but pared some of declines at the tail of trading. SHFE 1305 copper contract finally closed RMB 1,080/mt or 1.84% lower at RMB 57,620/mt, with trading volumes up 108,000 lots but positions down 22,640 lots. Total trading volumes on the SHFE increased by 239,000 lots, but total positions fell by 4,506 lots. The most active copper contract continued to shift. SHFE copper prices have dropped below all recent moving averages and are unlikely to reverse drops over the short term.

SHFE copper prices dropped by around RMB 1,000/mt and caused hedged copper to flow into spot markets. Imported copper supply also increased in the face of improving SHFE/LME copper price ratio. Overall spot copper supply remained sufficient as a result. High-quality copper was favored. Shanghai spot copper discounts were largely between RMB 150-270/mt in the morning business. Traded prices for standard-quality copper were between RMB 57,080-57,180/mt, and RMB 57,180-57,300/mt for high-quality copper. With the low-end SHFE copper price falling further near the midday, copper discounts shrank marginally. Buying from both speculators and downstream producers increased slightly, but markets were still dominated by pessimism. In the afternoon, high-quality copper supply decreased and markets were dominated by standard-quality copper, but discounts saw small changes, mainly between RMB 130-250/mt. Traded prices dropped to RMB 56,900-57,050/mt in the afternoon, heightening market pessimism, but buying was not seen at lows.