Metals News
SMM Base Metals Daily Review (2013-4-12)
price review forecast
Apr 15,2013

SHANGHAI, Apr. 15 (SMM) –

SHFE 1308 copper contract opened RMB 100/mt higher at RMB 55,150/mt on Friday as LME copper regained losses overnight. After its opening, the most active SHFE copper contract rose along with LME copper as the US dollar index fell back. However, August copper on the SHFE pulled back after reaching RMB 55,250/mt due to falling Shanghai Composite Index. In the afternoon, the most-traded SHFE copper contract slid to RMB 54,940/mt as shorts entered the market, but did bounce back at the tail of trading. Finally, SHFE copper for August delivery closed at RMB 55,150/mt, a gain of RMB 100/mt or 0.18%. Trading volumes and positions increased 12,126 lots and 13,168 lots, respectively. The struggle between longs and shorts will leave SHFE copper stagnant at RMB 55,000/mt.

Spot copper in Shanghai was quoted at a discount of RMB 0-70/mt and premium of RMB 0-50/mt over SHFE 1304 copper contract prices on Friday. Traded prices for standard-quality copper were between RMB 55,330-55,370/mt, and RMB 55,410-55,470/mt for high-quality copper. SHFE 1308 copper contract prices maintained winning-streak, and there was a price gap of over RMB 100/mt among SHFE copper contracts. Cargo holders were eager to sell before upcoming delivery of SHFE 1304 copper contracts. Growing spot copper supply pushed copper premium down. Some middlemen went bargain-hunting. High-quality copper was favored, widening its price spread with standard-quality copper. Downstream producers will not enter the market until SHFE 1305 copper contracts become the new current-month contract, leaving trading light. Cargo holders sold goods actively in the afternoon, with spot copper mainly quoted at discounts of RMB 0-100/mt, and traded prices were between RMB 55,250-55,400/mt. SHFE copper inventories fell 13,653 lots to 228,290 lots. Consumption improved slightly as some buyers purchased at low prices.

SHFE 1306 aluminum contract opened slightly higher at RMB 14,750/mt on April 12. Later, the most active aluminum contract sank to RMB 14,700/mt as longs took profits at highs, and hovered near RMB 14,720/mt in the afternoon. Finally, SHFE aluminum for June delivery shed RMB 15/mt or 0.10% at RMB 14,715/mt. Positions shrank 2,232 lots to 80,932 lots. The downside space of the most active SHFE aluminum contract was limited, though it failed to break though the 30-day moving average. The most-traded SHFE aluminum contract should continue to test support at RMB 14,700/mt. Latest SHFE aluminum inventories increased 4,397 mt to 509,458 mt.

Spot aluminum was traded at RMB 14,560-14,590/mt in Shanghai last Friday, a discount of RMB 50-80/mt over SHFE 1304 aluminum contract prices. Low-iron aluminum was trade around RMB 14,720/mt. SHFE 1306 aluminum contract pared some gains. Cargo holders were in a hurry to sell against stable buying interest from downstream producers and middlemen, sending spot aluminum prices down below RMB 14,600/mt. Overall trading was light. In the afternoon, the most active SHFE aluminum contract was mired. Wait-and-see mood dominated the spot market, with sparse offers reported at RMB 14,560-14,570/mt. Few deals were done.

SHFE 1306 lead contract price started at RMB 14,450/mt on Friday and moved between RMB 14,430-14,450/mt due to weak demand. Later, market concerns over tighter liquidity was rekindled by rumors that the schedule for the relaunch of IPO may be decided when the new chairman of China Securities Regulatory Commission attends the press conference this afternoon. In response, the Shanghai Composite Index plunged again, driving SHFE lead to fall to RMB 14,380/mt before closing at RMB 14,410/mt, down RMB 30/mt from Thursday. Trading volumes fell 18 lots to 76 lots, and holdings increased 20 lots to 2,162 lots.

Quotations for Chihong Zn & Ge in China’s spot market were around RMB 14,240/mt, with spot discounts of RMB 200/mt over the most active SHFE lead price. Nanfang was quoted at RMB 14,230/mt, while YT lead was offered at RMB 14,180/mt. Goods of Henan Jinli were quoted at RMB 14,230/mt. Some downstream buyers replenished goods modest ahead of the weekend, while cargo holders were not willing to sell goods at low prices. Transactions improved from a day earlier.

LME zinc prices last Friday rallied after initially dipping. SHFE 1307 zinc contracts prices opened flat at RMB 14,820/mt, and generally moved between RMB 14820-14,840/mt after opening. LME zinc prices plunged at noon, and the Shanghai Composite Index continued to weaken, closing the day with declines of 0.55%, dragging down SHFE zinc prices. As short momentum mounted after opening, SHFE zinc prices lost the 5-day moving average, finding temporary support at the 10-day moving average, and closing at RMB 14,785/mt, down RMB 55/mt or 0.37%. Trading volumes decreased by 7,112 lots, to 45,786 lots, and total positions increased by 3,344 lots to 142,798 lots.

SHFE 1307 zinc contract prices opened flat and then fluctuated. Discounts of #0 zinc against SHFE 1306 zinc contract prices were RMB 80-90/mt, with traded prices between RMB 14,680-14,710/mt. #1 zinc prices were between RMB 14,660-14,670/mt. Weak arbitrage opportunities and fluctuating SHFE zinc prices kept traders standing on the sidelines, while downstream buying interest was low despite the weekend neared, keeping overall transactions muted.

In Shanghai tin market, mainstream traded prices were between RMB 148,500-149,500/mt on Friday, with transactions mainly made for Yunxi, Yunheng, Yunxiang, and Kaiyuan. Yunxi was traded at RMB 149,500/mt, Yunheng was traded at RMB 149,000/mt, while traded prices for Kaiyuan and Yunxiang were around RMB 148,500/mt. Although low-end prices did not fall further, high-end prices remained unimproved. Trading was light and market was waiting for guides from LME tin.

In Shanghai, Jinchuan nickel prices were between RMB 114,000-114,100/mt last Friday, and Russian nickel prices were between RMB 113,000-113,100/mt. Due to a lack of arbitrage opportunity and low buying interest of traders, spot transactions were muted.

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