SHANGHAI, Apr. 11 (SMM)--
SHFE 1308 copper contract opened RMB 470/mt higher at RMB 55,390/mt on Wednesday as LME copper extended gains overnight. After its opening, the most active copper contract advanced to RMB 55,460/mt, but failed to climb to the 20-day moving average due to a lack of buying. In the afternoon, SHFE copper for August delivery tracked LME copper down to RMB 55,050/mt, and finally settled at RMB 55,140/mt, an increase of RMB 220/mt or 0.4%. Trading volumes shrank 17,150 lots, while positions increased 8,324 lots. Selling pressure at the 20-day moving average increased, but technical indicator was positive, so support at RMB 55,000/mt still needs to be tested.
Spot copper in Shanghai was quoted at a premium of RMB 50-150/mt over SHFE 1304 copper contract prices on Wednesday. Traded prices for standard-quality copper were between RMB 55,520-55,620/mt, and RMB 55,550-55,700/mt for high-quality copper. SHFE copper prices were mired. Cargo holders were eager to sell for cash, leading to increased spot copper supply and pushing premium all the way down. Premium of high-quality copper was less than RMB 100/mt near mid-day. Downstream buying interest dwindled at above RMB 55,000/mt. Middlemen stayed out of the market as there was no opportunity for arbitrage after spot copper premium tumbled. Premiums for spot copper were quoted higher at RMB 50-120/mt in the afternoon, but traded prices were down to RMB 55,400-55,520/mt.
SHFE 1306 aluminum contract opened slightly higher at RMB 14,665/mt on Wednesday. The most active aluminum contract pulled back to fluctuate between the 10-day and 20-day moving averages after touching a high of RMB 14,700/mt. Finally, SHFE aluminum for June delivery settled at RMB 14,670/mt, up RMB 20/mt or 0.14%. Positions contracted 1,672 lots to 86,650 lots. The price rise was due to short-covering for the most part and upward momentum is fading. In this context, the most-traded SHFE aluminum contract will unlikely break through RMB 14,700/mt in the short term.
Spot aluminum was traded at RMB 14,520-14,540/mt in Shanghai on Wednesday, a discount of RMB 60-80/mt over SHFE 1304 aluminum contract prices. Low-iron aluminum was trade around RMB 14,680/mt. SHFE 1306 aluminum contract edged up, but SHFE 1304 aluminum contract met resistance at RMB 14,600/mt. Spot aluminum prices climbed above RMB 14,500/mt along with SHFE aluminum. Traders were eager to sell, but downstream producers showed low acceptance toward high price, sending traded prices down slightly. Trading was moderate at below RMB 14,530/mt. In the afternoon, prices for the most active SHFE aluminum contract gave back some gains, stimulating most traders to sell for cash at RMB 14,510-14,520/mt. Only a small number of middlemen purchased some at low prices.
Although LME lead prices increased 1.35% overnight, SHFE 1306 lead contract price only moved around RMB 14,480/mt on April 10 after opening higher at RMB 14,500/mt due to resistance at the 10-day moving average. Prices then fell to RMB 14,450/mt as base metals weakened, ad finally closed at RMB 14,480/mt, flat with a day earlier. Trading volumes were down 20 lots to 62 lots, and positions only edged up 6 lots to 2,130 lots.
SHFE lead prices hovered near the 10-day moving average on April 10, and spot lead prices remained little changed from the previous trading day. Chihong Zn & Ge and Nanfang were quoted at RMB 14,270-14,280/mt, with spot discounts over the most active SHFE lead price of RMB 200/mt. Quotations for Shuangyan and YT were RMB 14,220/mt and RMB 14,230/mt, respectively. Market players were cautious, awaiting Fed's interest rate decision. Downstream buyers purchased modestly at low prices, and smelters were still reluctant to move goods, with transactions mainly done between traders.
LME zinc prices overnight closed the day with gains. LME zinc prices thus opened higher at RMB 14,925/mt today. The US Federal Reserve will announce the minute for its monetary policy meeting held on March 19th-20th, and any plan for tightening policies will affect the market significantly. Investors will remain cautious before that. SHFE zinc prices. SHFE 1307 zinc contracts prices moved between RMB 14,910-14,915/mt after opening. China reported trade deficit in March, depressing investor confidence and causing short momentum to grow. SHFE zinc prices inched down to RMB 14,865-14,885/mt, and finally closing at RMB 14,875/mt, up RMB 50/mt or 0.34%. Trading volumes decreased by 25,724 lots, to 51,066 lots, and total positions decreased by 2,276 lots to 135,464 lots.
SHFE 1307 zinc contract prices opened high, but then fell slightly. Discounts of #0 zinc against SHFE 1306 zinc contract prices were RMB 100-110/mt, with traded prices between RMB 14,720-14,740/mt. #1 zinc prices were between RMB 14,690-14,710/mt. LME zinc prices weakened, and dragged down SHFE zinc prices. With a lack of support from demand, spot zinc prices were pessimistic. Cargo holders sold goods modestly, while downstream buyers mainly took a wait-and-see attitude, keeping overall transactions muted.
Mainstream traded prices were mainly between RMB 148,500-150,000/mt in Shanghai tin market on April 10 with prices stabilizing. Low-priced goods were limited but high-end prices still lacked impetus to increase. Trading was modest with buying interest sagging.
In Shanghai, Jinchuan nickel prices were between RMB 114,300-114,500/mt on Wednesday, and Russian nickel prices were between RMB 113,300-113,500/mt. Transactions were muted in the morning trading as prices were relatively steady. Market quotes rose in the afternoon along with rising LME zinc prices. But since traders were unwilling to sell goods, transactions did not improve.