SHANGHAI, Mar. 6 (SMM) – As LME copper prices continued falling overnight, the most active SHFE 1306 copper contract opened RMB 280/mt down at RMB 56,700/mt Tuesday. NPC and CPPCC meetings introduced favorable measures and helped Chinese A-shares rally from lows. In this context, SHFE copper prices rose gradually after testing a low at RMB 56,660/mt, and challenged resistance at RMB 57,000/mt in the afternoon, with a high touching RMB 57,020/mt. SHFE 1306 copper contract closed RMB 510/mt or 0.9% higher at RMB 56,930/mt, with trading volumes and positions down 143,000 lots and 11,868 lots, respectively. Short investors chose to leave markets following copper price rebounds, but SHFE copper prices will suffer resistance at the 5-day moving average over the short term. Hence, sustained rebound in copper prices remains to be seen.
SHFE copper prices rebounded, but speculators in spot markets held divergent views. Those speculators who entered markets at lows the previous trading day chose to move goods aggressively for cash, but some hedged copper cargo-holders held prices firm. Overall spot copper supply remained sufficient, though. Shanghai spot copper discounts were quoted between RMB 80-160/mt in the morning business. Traded prices for standard-quality copper were between RMB 56,380-56,420/mt, and RMB 56,430-56,500/mt for high-quality copper. Low-quality hydro-copper supply was limited. As market pessimism eased some, traders took opportunities to buy, and downstream producers also increased purchase volumes at lows. In this context, Shanghai spot copper market activity improved in the morning. In the afternoon, as SHFE copper prices marched higher with forward SHFE contracts seeing larger gains, speculators became more willing to buy spot copper and sell SHFE contracts. Market transactions increased from morning levels as a result. Mainstream copper discounts shrank to RMB 60-150/mt in the afternoon, but traded prices surged to RMB 56,500-56,650/mt, with some speculators still standing on the sidelines.