Shanghai, Mar. 25 (SMM) – SHFE 1307 copper contract prices opened down by RMB 450/mt at RMB 55,580/mt as LME copper market overnight fell back from highs. After a low open, the contract moved higher, testing the RMB 56,000/mt mark, and fell back after meeting resistance at RMB 55,940/mt, and later generally moved below the daily moving averages. In the afternoon session, the contract extended declines, down to RMB 55,460/mt, and returned the daily moving averages after finding support at the 5-day moving averages. Finally, the contract closed at RMB 55,630/mt, down RMB 400/mt or 0.71%. Trading volumes of SHFE three-month copper contracts were down 219,000 lots, and positions were up 1,572 lots. Total trading volumes were down 326,000 lots, and total positions were up 10,040 lots. The support at the 5-day moving averages was strong despite downward pressures facing SHFE forward-month copper contracts.
In the spot market, cargo-holders showed higher interest in moving goods after SHFE copper market dropped slightly. As the SHFE/LME copper price ratio rose, supply of imported copper increased. Spot premiums were down all the way, with quotations between RMB 20-120/mt. Standard-quality copper traded between RMB 55,820-55,920/mt, and high-quality copper traded between RMB 55,880-56,020/mt. During the earlier trading hours, some speculators entered the market for purchases, and as copper prices dropped, trading sentiment was depressed. Middlemen were reluctant in buying, and downstream producers, however, increased purchases ahead of the weekend, helping improve transactions. In the afternoon business, spot premiums were up slightly to RMB 40-150/mt as SHFE copper market inched lower, and only a limited number of speculators entered the market, and downstream producers generally exited the market. SHFE copper inventories were up 7,401 mt to 239,273 mt in the week ending March 22, causing by large arrivals of imported goods with improvement in the ratio.