SHANGHAI, Mar. 22 (SMM)--
With LME copper rising overnight, SHFE 1307 copper contract prices gapped RMB 350/mt higher at RMB 55,450/mt on March 21. In the morning session, HSBC's China preliminary manufacturing PMI for March beat forecasts, pushing LME and SHFE copper up. Combined with the redound in the Shanghai Composite Index, the most active SHFE copper contract prices broke through RMB 56,000/mt, and later jumped even higher to RMB 56,630/mt on massive short-covering and dip-buying. Finally, SHFE 1307 copper contract prices finished RMB 680/mt or 1.23% higher at RMB 55,780/mt. Trading volumes increased 58,712 lots, while positions decreased 268,880 lots. SHFE copper for July delivery should rise further in the near term.
Spot copper discounts were RMB 0-40/mt and premiums RMB 0-80/mt in Shanghai on Thursday. Traded prices for standard-quality copper were between RMB 56,000-56,400/mt, and RMB 56,050-56,500/mt for high-quality copper. HSBC's China March manufacturing PMI beat forecasts, helping SHFE 1307 copper contract prices gain by RMB 1,000/mt after a high opening. A small number of speculators bought in at lows in the morning and then quickly sold at higher prices. Spot copper supplies were ample and premiums dropped all the way down. Standard-quality copper was sold at discounts. Market quotations varied greatly. Middlemen bought spot copper while selling SHFE copper. Few transactions were completed at above RMB 56,000/mt and middlemen were the major contributors to today's transactions. In the afternoon, SHFE copper prices fell, driving spot discounts over the most active SHFE copper contract price to narrow. Quotations for high-quality remained little changed from the morning trading session.
SHFE 1306 aluminum contract prices opened at RMB 14,690/mt on March 21. HSBC's China preliminary March manufacturing PMI was upbeat, triggering short-covering and helping the most active SHFE aluminum contract hit a high of RMB 14,775/mt along with other base metals. In the afternoon, SHFE aluminum for June delivery inched down as longs were limited. Finally, the most-traded SHFE aluminum contract closed at RMB 14,730/mt, up RMB 45/mt or 0.31%. Positions were down 2,960 lots to 92,608 lots. Despite encouraging manufacturing PMI, demand remains tepid, eroding the upside space of the most active SHFE aluminum contracts, which should struggle at RMB 14,700/mt for the near term.
Spot aluminum was mainly traded at RMB 14,540-14,560/mt in Shanghai on Thursday, a discount of RMB 70-100/mt over SHFE current-month aluminum contract prices. Low-iron aluminum was trade around RMB 14,640/mt. SHFE 1306 aluminum contract prices extended gains due to upbeat preliminary March manufacturing PMI from China. Cargo holders were eager to move goods since they believe aluminum prices will not rise any further in the future. Middlemen went bargain-hunting, while downstream producers purchased only as needed, leaving mainstream traded prices stagnant at RMB 14,550/mt. Overall trading rebounded slightly. In the afternoon, the most active SHFE aluminum contract prices met resistance at the upper end, promoting traders to actively move goods, with offers at RMB 14,540-14,550/mt. Downstream producers and middlemen stood on the sidelines, leaving trading subdued.
The most active SHFE lead contract price opened at RMB 14,570/mt on March 21 and hit a high of RMB 14,610/mt due to positive China PMI and rises in domestic stocks and SHFE copper prices. The contract finally settled at RMB 14,590/mt, up RMB 40/mt and standing above the 5-day moving average this week. Trading volumes fell 170 lots to 88 lots, while positions were down 14 lots to 2,146 lots.
SHFE lead prices gapped higher on Thursday due to positive HSBC PMI for March, and spot lead prices in China also edged up. Prices for Chihong Zn & Ge and Nanfang were mainly offered at RMB 14,480-14,490/mt, with spot discounts of RMB 100/mt against the most active SHFE lead contract price. Quotations for Shenqian were at RMB 14,440/mt. Cargo holders lowered prices but downstream buyers still purchased as needed.
LME zinc prices overnight closed with gains. SHFE 1306 zinc contract prices opened slightly higher at RMB 14,945/mt today, and meeting resistance at RMB 15,000/mt. HSBC's fresh PMI for China rose slightly from February, and the Shanghai Composite rose further. As large numbers of shorts left the market, SHFE 1306 zinc contract prices hit RMB 15,095/mt, fluctuating around RMB 15,000/mt in the afternoon, and finally closed at RMB 14,995/mt. Trading volumes increased by 5,528 lots, to 72,432 lots. Total positions decreased by 5,236 lots to 132,000 lots.
SHFE 1306 zinc contract prices opened high and moved higher today. Discounts of #0 zinc against SHFE 1306 zinc contract prices expanded RMB 190-220/mt, with traded prices around RMB 14,780-14,830/mt. #1 zinc prices were RMB 14,780-14,790/mt. Some downstream enterprises and speculators entered the market due to rising SHFE zinc prices, causing overall transactions to improve.
Mainstream traded prices in Shanghai tin market were between RMB 151,000-153,000/mt on Thursday, with a few goods traded at RMB 150,500/mt. Market confidence was hurt as LME tin prices closed lower, and downstream buyers were still unwilling to purchase although LME tin prices tended to stop falling, leaving trading quiet.
Jinchuan Group raised ex-works nickel prices by RMB 1,000/mt, to RMB 118,000/mt on Thursday. During the morning trading hours the Shanghai nickel spot market, mainstream offers of nickel from Jinchuan Group were around RMB 118,000/mt and mainstream offers of nickel from Russia were around RMB 117,000/mt. As LME nickel prices advanced during the afternoon trading hours, Jinchuan Group nickel prices rose to RMB 118,500/mt and Russia nickel prices rose to RMB 117,500/mt. Market confidence improved amid LME nickel price hike, which boosted transactions as well.