SHANGHAI, Apr. 3 (SMM) – LME copper rallied this morning, helping SHFE 1307 copper contract open RMB 140/mt higher at RMB 54,180/mt on Tuesday. After its opening, SHFE 1308 copper contracts became the most active one, which hovered around RMB 54,200/mt in the morning, with support at RMB 54,000/mt. In the afternoon, SHFE copper for August delivery toughed an intraday high of RMB 54,550/mt as shorts continued to close positions, and finally finished RMB 440/mt or 0.81% higher at RMB 54,480/mt. Trading volumes of SHFE 1308 copper contracts increased 15,322 lots, with positions also up 14,982 lots. SHFE copper followed LME copper up following sharp price declines earlier, but its upside space should be limited.

Spot copper premiums were RMB 120-220/mt in Shanghai on Tuesday. Traded prices for standard-quality copper were between RMB 54,480-54,640/mt, and RMB 54,530-54,750/mt for high-quality copper. Suppliers of imported copper refused to sell at lows after the SHFE/LME copper price ratio fell sharply. SHFE 1307 SHFE copper contract fell back by nearly RMB 200/mt near the mid-day, while spot copper premiums rose further. High-quality copper was favored by middlemen, widening price gap with standard-quality copper. Downstream producers continued to go bargain hunting. Trading will improve further after the SHFE/LME copper price ratio bounces back. Some middlemen purchased spot goods and sell futures in the afternoon, and premiums for spot copper were quoted slightly lower to RMB 120-200/mt, with traded prices at RMB 54,650-54,780/mt.