SHANGHAI, Mar. 13 (SMM) – With LME copper rallying overnight, the most active SHFE 1306 copper contract opened slightly RMB 120/mt up at RMB 56,800/mt Tuesday. The contract suffered resistance at the 10-day moving average following the opening and reached a high at RMB 56,830/mt, with prices between the 5 and 10-day moving average in the morning. However, as the Shanghai Composite Index dived by nearly 2% in the afternoon, SHFE copper prices were dragged down to RMB 56,320/mt. SHFE 1306 copper contract finally settled RMB 340/mt or 0.6% lower at RMB 56,340/mt, with trading volumes up 21,492 lots but positions down 8,054 lots. The most active copper contract continued to shift. With technical indicators pointing downward and weak support at the 5-day moving average, SHFE copper prices are likely to test RMB 56,300/mt for the immediate future.
SHFE copper prices lacked momentum to rebound, but some hedged copper was still locked. Copper prices also stopped falling temporarily and heightened some cargo-holders’ expectation over future copper prices. In this context, they quoted firm prices, causing spot copper supply to decrease. High-quality copper supply was limited. Shanghai spot copper premiums were quoted mainly between RMB 0-100/mt in the morning business. Traded prices for standard-quality copper were between RMB 56,600-56,650/mt, and RMB 56,650-56,750/mt for high-quality copper. With premiums restricting trader buying interest, Shanghai spot copper market transactions were limited. In the afternoon, as SHFE copper prices declined further, copper premiums marched slightly higher, up to largely RMB 20-120/mt, while traded prices were RMB 56,450-56,650/mt. Some traders still entered markets in the afternoon, but spot copper supply decreased further.