SHANGHAI, Apr. 22 (SMM) – LME copper revered losses overnight, helping SHFE 1308 copper contract open RMB 260/mt higher at RMB 50,790/mt on Friday. The most active SHFE copper contract retreated to RMB 49,750/mt near mid-day as LME copper dropped below USD 6,900/mt. In the afternoon, the Shanghai Composite Index soared 2.3% and LME copper stopped falling, helping push SHFE copper for August delivery up to RMB 51,200/mt. Finally, SHFE 1308 copper contract ended the day up RMB 160/mt or 0.34% at RMB 50,690/mt. Trading volumes and positions increased 813,000 lots and 13,566 lots, respectively. The most active SHFE copper contract should be vulnerable at RMB 50,000/mt in the near term.
Premiums for spot copper kept falling as cargo holders cut prices for salsa and as the RMB and the SHFE/LME copper price ratio recovered which led to ample spot copper supplies. Spot copper in Shanghai was quoted at a premium of RMB 130-270/mt over SHFE 1305 copper contract on Friday. Traded prices for standard-quality copper were between RMB 50,550-51,100/mt, and RMB 50,600-51,300/mt for high-quality copper. SHFE 1308 copper contract opened higher, alleviating panic sentiment and allowing cargo holders to hold offers at premium. Later, SHFE copper dropped, causing cargo holders to sell for cash by lowering premium. Supply of imported copper increased as the RMB appreciated to 6.1718 against the US dollar and as the SHFE/LME copper price ratio rose. Ample spot copper supplies pushed premium all the way down. Some middlemen bought spot copper while selling off SHFE copper in the morning. The most active SHFE copper contract tumbled below RMB 50,000/mt towards mid-day, rekindling panic sentiment. Downstream producers refused to enter the market, leaving overall trading muted. In the afternoon, quotations varied largely, with premiums at RMB 20-200/mt, and traded prices at RMB 50,850-51,400/mt. Transactions were limited. SHFE copper inventories fell 4,627 lots to 223,663 lots as of last Friday as some downstream buyers started purchasing when prices slumped.