SMM Base Metals Market Daily Review (2013-4-26)

SHANGHAI, Apr. 27 (SMM) –

 

SHFE 1308 copper contract started Friday RMB 1,080/mt higher at RMB 52,060/mt. After its opening, the most active SHFE copper contract advanced to RMB 52,480/mt, but later moved lower as investors closed positions. Falling Shanghai Composite Index also weighted SHFE copper for delivery in four months to RMB 51,280/mt. Finally, SHFE copper for August delivery gained RMB 790/mt or 1.55% to close at RMB 51,770/mt. Trading volumes and positions decreased 126,000 lots and 34,220 lots, respectively. How will SHFE copper move next week depends on LME copper prices during the holiday.   

 

Spot copper in Shanghai was quoted at a premium of RMB 170-250/mt over SHFE 1305 copper contract on Friday. Traded prices for standard-quality copper were between RMB 52,300-52,650/mt, and RMB 52,350-52,800/mt for high-quality copper. SHFE 1308 copper contract moved lower after a high opening. Spot copper supply decreased. Offers for standard-quality copper were firm due to tight supplies. Some middlemen entered the market in the morning, but later sold goods out. Downstream producers increased purchases for the upcoming Chinese May Day holiday. 

 

SHFE 1307 aluminum contract started slightly higher at RMB 14,665/mt on Friday. The most active SHFE aluminum contract broke through RMB 14,700/mt in the morning before immediately falling back. Longs and shorts exited the market, leading to sharp declines in SHFE 1307 aluminum contracts. As a result, SHFE 1306 aluminum contract became the most active one again, which finally closed at RMB 14,630/mt, up RMB 25/mt or 0.17%. Positions decreased 1,890 lots to 56,358 lots. Investors closed positions before the three-day public holiday to avoid risks. The most active SHFE aluminum contract should remain stable at RMB 14,600/mt next week if LME aluminum is little changed during the holiday.

 

Spot aluminum was traded at RMB 14,520-14,530/mt in Shanghai on Friday, a discount of RMB 80-90/mt over SHFE 1305 aluminum contract. Low-iron aluminum was traded around RMB 14,680/mt. SHFE 1305 aluminum contract climbed above RMB 14,600/mt, boosting market sentiment. Downstream producers increased purchases on the last trading day before the Chinese May Day holiday. Prices in Guangdong were nearly RMB 200/mt higher than in Shanghai, enticing some middlemen to buy goods in Shanghai and then sell them in Guangdong. In this context, traders held offers firm at RMB 14,520/mt. Aluminum ingot offered at RMB 14,510/mt was quickly sold out, but trading was down when price rose to RMB 14,530/mt. Overall trading was brisk. In the afternoon, the most active SHFE aluminum contract pared some gains, but SHFE 1305 aluminum contract remained stagnant at RMB 14,600/mt. Sparse offers were reported at RMB 14,520-14,530/mt in spot market, but trading was muted. Spot aluminum market will remain quiet today and tomorrow as SHFE market is closed for the holiday.   

    

SHFE 1306 lead contract price opened higher at RMB 13,945/mt as expected on Friday and soon rallied to RMB 13,990/mt, but resistance at RMB 14,000/mt was evident. Later, as the Shanghai Composite Index fluctuated down and as spot lead demand was weak, SHFE lead fell to move around RMB 13,850/mt and closed the day at RMB 13,875/mt. Traded volumes increased 94 lots to 188 lots, while positions increased 38 lots to 2,146 lots. 

 

SHFE lead prices fell after opening higher on Friday, and cargo holders in China’s spot lead markets were reluctant to sell goods. Trading for spot lead was quiet and quotations were rare with many market players exiting the market ahead of the May Day holiday. Jinli, Wanyang, and Jinsha were quoted at RMB 13,780-13,800/mt in Wuxi, level with the SHFE 1305 lead contract price. Downstream buyers have completed pre-holiday replenishments and only watched on the sidelines.

 

SHFE 1307 zinc contracts prices opened high at RMB 14,790/mt on Friday as LME zinc prices overnight closed the day with gains. As the Shanghai Composite Index opened low and moved lower, with daily declines of 0.97%, SHFE zinc prices briefly touched RMB 14,835/mt, but then fell to RMB 14,750-14,770/mt, with prices finally closing at RMB 14,745/mt, up RMB 75/mt or 0.51%. Trading volumes decreased by 872 lots, to 30,660 lots, and total positions decreased by 6,394 lots to 106,672 lots. Trading volumes of SHFE 1308 zinc contracts decreased by 5,566 lots, to 97,474 lots, and total positions decreased by 838 lots to 104,454 lots, with the shift expected to be made next Thursday.

 

SHFE 1307 zinc contract prices opened high but fell later in the day. Spot discounts of #0 zinc against SHFE 1308 zinc contract prices were RMB 120-140/mt, with traded prices between RMB 14,670-14,710/mt. #1 zinc prices were between RMB 14,650-14,670/mt. Smelters continued to hold back goods in the last trading day before holiday, while traders were actively moving goods, but downstream buyers stood on the sidelines, keeping overall transactions muted. Discounts of #0 zinc remained around RMB 110/mt in the afternoon, with prices between RMB 14,670-14,690/mt.

 

Spot tin prices in Shanghai were mainly between RMB 144,000-145,000/mt on Friday. Supply in spot market was limited and downstream buying interest was undermined by rising prices. Besides, as buyers completed replenishments in the past few days, trading became quiet. In the afternoon, transactions were rarely reported.

 

Jinchuan Nickel raised ex-works prices by RMB 1,000/mt, to RMB 108,000/mt on Friday. In Shanghai, Jinchuan nickel prices were concentrated between RMB 109,000-109,200/mt in the morning, while Russian nickel prices were between RMB 108,200-108,400/mt. Spot quotes were lowered as LME nickel prices inched down during Asian trading hours, with Jinchuan nickel prices down to RMB 108,900/mt, but Russian nickel prices firm between RMB 108,000-108,200/mt due to tight supply. Downstream buyers were standing on the sidelines due to rising spot prices, and traders also took a wait-and-see attitude ahead of the holiday, keeping transactions muted.