SMM Base Metals Daily Review (2013-4-16)-Shanghai Metals Market

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SMM Base Metals Daily Review (2013-4-16)

Price Review & Forecast 10:06:25AM Apr 17, 2013 Source:SMM

SHANGHAI, Apr. 17 (SMM) – 

Copper
LME copper extended losses last night, causing SHFE 1308 copper contract to open RMB 1,220/mt lower at RMB 52,310/mt on Tuesday. After its opening, the struggle between longs and shorts left the most active copper contract hovering near the daily moving average, with support at RMB 51,920/mt. During the second trading session, SHFE copper tracked LME copper up as the US dollar index fell. The Shanghai Composite Index reversed declines, pushing August copper on the SHFE up further to RMB 53,060/mt at the tail of trading. Finally, SHFE copper for August delivery closed at RMB 52,900/mt, a decrease of RMB 630/mt. Trading volumes and positions of SHFE 1308 copper contracts decreased 9,924 lots and 428 lots, respectively, while trading volumes and positions of SHFE 1309 copper contracts increased 5,668 lots and 16,952 lots, respectively. Judging from today’s Shanghai Composite Index, investors attention has shifted to property sector. SHFE copper may be able to recover earlier losses if LME copper stops falling. 

Spot copper was quoted between RMB 52,750-53,300/mt on Tuesday, with premiums between RMB 200-250/mt. Copper prices rose RMB 400/mt during the second trading session, depressing buying interest. Imported copper increased, and came in many varieties. As a result, premiums of standard-quality copper were lowered, and premiums of high-quality copper also narrowed to RMB 150-250/mt, with traded prices at RMB 52,850-53,250/mt. Downstream producers were divided on their willingness to buy. Some watched from the sidelines out of bearishness, while others went bargain-hunting. Overall trading improved, but bearishness continued to dominate the market. Prices varied largely in the afternoon as some cargo holders stayed on the sidelines which left fewer spot copper supplies. Premiums were quoted at RMB 150-280/mt, and traded prices were between RMB 53,000-53,300/mt.

Aluminum
SHFE 1306 aluminum contract opened at RMB 14,550/mt on Tuesday as LME aluminum reversed losses overnight. The most active aluminum contract retreated to RMB 14,460/mt along with SHFE copper in early session, but later rebounded on short-covering.  Finally, SHFE aluminum for June delivery closed RMB 15/mt or 0.10% higher at RMB 14,560/mt. Positions decreased 2,542 lots to 76,222 lots. The most-traded SHFE aluminum contract should test resistance at RMB 14,600/mt as pressure from shorts has eased some.

Spot aluminum was traded at RMB 14,390-14,420/mt in Shanghai on Tuesday, a discount of RMB 50-80/mt over SHFE 1304 aluminum contract. Low-iron aluminum was traded around RMB 14,570/mt. SHFE 1306 aluminum contract proved more resilient than other base metals, but spot aluminum market remained bearish. Eagerness to sell by some traders sent spot aluminum below RMB 14,400/mt, which attracted a small number of middlemen to go bargain-hunting. Prices of brand deliverable aluminum ingot were firm above RMB 14,400/mt. Downstream producers purchased to need, depressing overall trading. In the afternoon, the most active SHFE aluminum contract rebounded, improving sentiment in spot market. Traders held back goods, with offers up to RMB 14,420-14,440/mt. Middlemen refused to buy at highs, leaving trading muted.

Lead
SHFE 1306 lead contract price gapped lower at RMB 13,805/mt on Tuesday, a new low since October 2011, and rallied soon after opening but with increase limited. Prices hovered between RMB 13,990-14,080/mt to close at RMB 14,035/mt, up RMB 15/mt from a day earlier. Trading was enlivened, with traded volumes up 236 lots to 392 lots. Positions fell 24 lots to 2,132 lots.

SHFE lead prices opened lower at stabilized around RMB 14,000/mt on Tuesday. In China’s domestic spot markets, Chihong Zn & Ge was quoted at RMB 13,980/mt, with spot discounts over the most active SHFE lead contract narrowing to RMB 70/mt. Yuguang was offered at RMB 13,960/mt, with premiums of RMB 10/mt over the SHFE 1305 lead contract price, while Yubei was quoted at RMB 13,940/mt. Prices for Shenqian were offered around RMB 13,940/mt. The low prices boosted buying interest downstream, while cargo holders only sold goods modestly. Prices changed little in the afternoon, and transactions improved from the previous day.

Zinc
SHFE 1307 zinc contracts prices opened low at RMB 14,380/mt, dragged down by plunging global commodity and stocks markets. Due to a high SHFE/LME copper price ratio and investors selling goods, SHFE 1307 zinc contracts prices plummeted to a nine-and-a-half-month low of RMB 14,320/mt, but then inched up to RMB 14,645/mt owning to a rising Shanghai Composite Index and climbing LME zinc prices, with prices closing at RMB 14,580/mt, up RMB 75/mt or 0.52%. Trading volumes increased by 1,570 lots, to 116,000 lots, and total positions increased by 1,908 lots to 155,000 lots.

SHFE 1307 zinc contract prices opened low and then rallied, gaining back some yesterday losses. Discounts of #0 zinc against SHFE 1306 zinc contract prices were RMB 0-40/mt, with traded prices between RMB 14,430-14,470/mt. #1 zinc prices were between RMB 14,400-14,420/mt. Downstream buyers caution increased as SHFE zinc prices extended declines, and purchased modestly, with overall transactions muted.

Tin
Spot tin prices in Shanghai fell to RMB 143,000-145,000/mt on Tuesday. The falls in LME tin prices on Monday hurt market confidence, triggering wait-and-see sentiment and leaving trading modest. LME tin stabilized Tuesday, and spot tin prices also held steady in the afternoon. Some downstream buyers and traders felt the need to replenish goods, but trading remained light.

Nickel
In Shanghai, nickel prices fluctuated significantly on Tuesday. Jinchuan nickel prices were quoted as low as RMB 108,000/mt, but since LME nickel prices continued to rebounded, market confidence increased, with traders raising their quotes. Jinchuan nickel prices rose to RMB 108,200/mt, and then advanced further to RMB 108,500/mt in the afternoon, with quotes as high as RMB 109,000-109,200/mt due to rising LME nickel prices (Russian nickel prices were generally RMB 1,000/mt below Jinchuan nickel, with fluctuations similar to Jinchuan nickel price). Market sentiment improved as LME nickel prices rebounded, with transactions brisk.
 

SMM Base Metals Daily Review (2013-4-16)

Price Review & Forecast 10:06:25AM Apr 17, 2013 Source:SMM

SHANGHAI, Apr. 17 (SMM) – 

Copper
LME copper extended losses last night, causing SHFE 1308 copper contract to open RMB 1,220/mt lower at RMB 52,310/mt on Tuesday. After its opening, the struggle between longs and shorts left the most active copper contract hovering near the daily moving average, with support at RMB 51,920/mt. During the second trading session, SHFE copper tracked LME copper up as the US dollar index fell. The Shanghai Composite Index reversed declines, pushing August copper on the SHFE up further to RMB 53,060/mt at the tail of trading. Finally, SHFE copper for August delivery closed at RMB 52,900/mt, a decrease of RMB 630/mt. Trading volumes and positions of SHFE 1308 copper contracts decreased 9,924 lots and 428 lots, respectively, while trading volumes and positions of SHFE 1309 copper contracts increased 5,668 lots and 16,952 lots, respectively. Judging from today’s Shanghai Composite Index, investors attention has shifted to property sector. SHFE copper may be able to recover earlier losses if LME copper stops falling. 

Spot copper was quoted between RMB 52,750-53,300/mt on Tuesday, with premiums between RMB 200-250/mt. Copper prices rose RMB 400/mt during the second trading session, depressing buying interest. Imported copper increased, and came in many varieties. As a result, premiums of standard-quality copper were lowered, and premiums of high-quality copper also narrowed to RMB 150-250/mt, with traded prices at RMB 52,850-53,250/mt. Downstream producers were divided on their willingness to buy. Some watched from the sidelines out of bearishness, while others went bargain-hunting. Overall trading improved, but bearishness continued to dominate the market. Prices varied largely in the afternoon as some cargo holders stayed on the sidelines which left fewer spot copper supplies. Premiums were quoted at RMB 150-280/mt, and traded prices were between RMB 53,000-53,300/mt.

Aluminum
SHFE 1306 aluminum contract opened at RMB 14,550/mt on Tuesday as LME aluminum reversed losses overnight. The most active aluminum contract retreated to RMB 14,460/mt along with SHFE copper in early session, but later rebounded on short-covering.  Finally, SHFE aluminum for June delivery closed RMB 15/mt or 0.10% higher at RMB 14,560/mt. Positions decreased 2,542 lots to 76,222 lots. The most-traded SHFE aluminum contract should test resistance at RMB 14,600/mt as pressure from shorts has eased some.

Spot aluminum was traded at RMB 14,390-14,420/mt in Shanghai on Tuesday, a discount of RMB 50-80/mt over SHFE 1304 aluminum contract. Low-iron aluminum was traded around RMB 14,570/mt. SHFE 1306 aluminum contract proved more resilient than other base metals, but spot aluminum market remained bearish. Eagerness to sell by some traders sent spot aluminum below RMB 14,400/mt, which attracted a small number of middlemen to go bargain-hunting. Prices of brand deliverable aluminum ingot were firm above RMB 14,400/mt. Downstream producers purchased to need, depressing overall trading. In the afternoon, the most active SHFE aluminum contract rebounded, improving sentiment in spot market. Traders held back goods, with offers up to RMB 14,420-14,440/mt. Middlemen refused to buy at highs, leaving trading muted.

Lead
SHFE 1306 lead contract price gapped lower at RMB 13,805/mt on Tuesday, a new low since October 2011, and rallied soon after opening but with increase limited. Prices hovered between RMB 13,990-14,080/mt to close at RMB 14,035/mt, up RMB 15/mt from a day earlier. Trading was enlivened, with traded volumes up 236 lots to 392 lots. Positions fell 24 lots to 2,132 lots.

SHFE lead prices opened lower at stabilized around RMB 14,000/mt on Tuesday. In China’s domestic spot markets, Chihong Zn & Ge was quoted at RMB 13,980/mt, with spot discounts over the most active SHFE lead contract narrowing to RMB 70/mt. Yuguang was offered at RMB 13,960/mt, with premiums of RMB 10/mt over the SHFE 1305 lead contract price, while Yubei was quoted at RMB 13,940/mt. Prices for Shenqian were offered around RMB 13,940/mt. The low prices boosted buying interest downstream, while cargo holders only sold goods modestly. Prices changed little in the afternoon, and transactions improved from the previous day.

Zinc
SHFE 1307 zinc contracts prices opened low at RMB 14,380/mt, dragged down by plunging global commodity and stocks markets. Due to a high SHFE/LME copper price ratio and investors selling goods, SHFE 1307 zinc contracts prices plummeted to a nine-and-a-half-month low of RMB 14,320/mt, but then inched up to RMB 14,645/mt owning to a rising Shanghai Composite Index and climbing LME zinc prices, with prices closing at RMB 14,580/mt, up RMB 75/mt or 0.52%. Trading volumes increased by 1,570 lots, to 116,000 lots, and total positions increased by 1,908 lots to 155,000 lots.

SHFE 1307 zinc contract prices opened low and then rallied, gaining back some yesterday losses. Discounts of #0 zinc against SHFE 1306 zinc contract prices were RMB 0-40/mt, with traded prices between RMB 14,430-14,470/mt. #1 zinc prices were between RMB 14,400-14,420/mt. Downstream buyers caution increased as SHFE zinc prices extended declines, and purchased modestly, with overall transactions muted.

Tin
Spot tin prices in Shanghai fell to RMB 143,000-145,000/mt on Tuesday. The falls in LME tin prices on Monday hurt market confidence, triggering wait-and-see sentiment and leaving trading modest. LME tin stabilized Tuesday, and spot tin prices also held steady in the afternoon. Some downstream buyers and traders felt the need to replenish goods, but trading remained light.

Nickel
In Shanghai, nickel prices fluctuated significantly on Tuesday. Jinchuan nickel prices were quoted as low as RMB 108,000/mt, but since LME nickel prices continued to rebounded, market confidence increased, with traders raising their quotes. Jinchuan nickel prices rose to RMB 108,200/mt, and then advanced further to RMB 108,500/mt in the afternoon, with quotes as high as RMB 109,000-109,200/mt due to rising LME nickel prices (Russian nickel prices were generally RMB 1,000/mt below Jinchuan nickel, with fluctuations similar to Jinchuan nickel price). Market sentiment improved as LME nickel prices rebounded, with transactions brisk.