SHANGHAI, Mar. 14 (SMM) – With LME copper rebounding significantly overnight, the most active SHFE 1306 copper contract opened RMB 310/mt up at RMB 56,910/mt Wednesday. The contract tested a low at RMB 56,750/mt before stabilizing, and broke resistance at the RMB 57,000/mt point, driven by rising LME copper. However, SHFE copper prices then hovered narrowly at current levels after suffering resistance at RMB 57,160/mt. In the afternoon, as the Shanghai Composite Index fell by more than 1%, SHFE copper prices declined below the daily moving average of RMB 56,950/mt. Giving up some of daily gains, SHFE 1306 copper contract closed at RMB 56,850/mt, still up RMB 250/mt or 0.44%, with trading volumes and positions down 21,412 lots and 14,058 lots, respectively. Short and long investors chose to close positions when SHFE copper stabilized. SHFE copper prices won temporary support at the 10-day moving average, but still suffered high pressures.
SHFE copper prices marched higher after starting up, so hedged copper was still locked out of spot copper markets. The price gap among forward SHFE copper contracts expanded to nearly RMB 300/mt, enticing some speculators to buy at lows. However, these speculators chose to sell after copper prices rose, causing spot copper premiums to shrink all the way. Shanghai spot copper premiums were quoted largely between RMB 0-100/mt in the morning business. Traded prices for standard-quality copper were between RMB 56,750-56,930/mt, and RMB 56,800-57,050/mt for high-quality copper. Standard-quality copper saw a rapid decline in premiums, down to around RMB 0/mt, increasing its price gap with high-quality copper. Most downstream producers and traders took a wait-and-see posture before delivery for SHFE 1303 copper contract, leading to quiet market activity. In the afternoon, with some cargo-holders stepping up sale volumes, copper premiums continued narrowing, and standard-quality copper offered discounts. Mainstream copper offers were between discounts RMB 40/mt and premiums RMB 60/mt in the afternoon, while traded prices inched down to RMB 56,700-56,900/mt, depressing market optimism over future copper prices.