SHANGHAI, Apr. 18 (SMM) – LME copper recovered losses last night, helping SHFE 1308 copper contract start the day RMB 600/mt higher at RMB 53,120/mt on Wednesday. After its opening, the most active SHFE copper contract touched a high of RMB 53,260/mt, but later fell back. Shorts continued to increase positions, coupled with a pullback in the Shanghai Composite Index, causing SHFE copper for August delivery to surrender all the gains recorded during the day. SHFE copper for delivery in four months dropped further to RMB 53,160/mt at the tail of trading, and finally closed down RMB 290/mt or 0.55% at RMB 52,230/mt. Trading volumes decreased 61,616 lots, but positions increased 57,544 lots. Violent swing in SHFE copper prices are expected in the future.
Spot copper in Shanghai was quoted at a premium of RMB 130-270/mt over SHFE 1304 copper contract on Wednesday. Traded prices for standard-quality copper were between RMB 53,150-53,280/mt, and RMB 53,230-53,450/mt for high-quality copper. SHFE 1308 copper contract drifted lower after a high opening. Cargo holders were more willing to sell at lower prices to generate cash. Spot copper premium fell and supply of imported copper remained ample. Premium of high-quality copper rose towards mid-day. Downstream producers were little interested in entering the market out of their belief that rebound in copper prices will not sustain, while middlemen largely held to the sidelines, depressing overall trading. The further decline in SHFE copper undermined selling interest and limited supply, with premiums for spot copper at RMB 140-240/mt, and traded prices down to RMB 52,800-53,050/mt.