SHANGHAI, Jun. 3 (SMM) –
SHFE 1309 copper contract started Friday RMB 570/mt higher at RMB 52,790/mt, helped by rising LME copper last Friday. After its opening, the most active SHFE copper contract jumped to RMB 53,050/mt, but was later dragged down by a wave of sell-off. In the afternoon, the Shanghai Composite Index plunged, weighing SHFE copper for September delivery down to RMB 52,520/mt. Finally, SHFE 1309 copper contract gained RMB 500/mt or 0.96% to end at RMB 52,720/mt, with trading volumes and positions down 280,000 lots and 11,316 lots, respectively.
Spot copper in Shanghai was offered at a premium of RMB 150-300/mt over SHFE 1306 copper contract prices on Friday. Traded prices for standard-quality copper were between RMB 53,500-53,600/mt, and RMB 53,570-53,750/mt for high-quality copper. SHFE 1309 copper contract prices failed to rebound. Spot copper supply was ample, and premium held steady. Some middlemen went bargain hunting, while downstream producers watched from the sidelines. Premiums were weighed down in the afternoon due to ample supply and fell to RMB 100-260/mt. Traded prices were RMB 53,300-53,550/mt, with transactions sparse. SHFE copper inventories increased 2,693 mt to 179,317 mt last week, and inventories are expected to rise further given the increasing imports and soft consumption.
SHFE 1308 aluminum contract opened higher at RMB 14,750/mt on May 31, buoyed by surging LME aluminum. SHFE three-month aluminum contract hovered near its opening price since longs were cautious, but did advance at the tail of trading as shorts exited the market. Finally, the most active SHFE aluminum contract closed at an intraday high of RMB 14,830/mt, up RMB 165/m or 1.13%, the best performer among base metals. Positions fell 4,474 lots to 51,592 lots. SHFE aluminum for August delivery should struggle at RMB 14,800/mt this week.
Spot aluminum was traded at RMB 14,720-14,740/mt in Shanghai last Friday, a discount of RMB 20-50/mt over SHFE 1306 aluminum contract prices. Low-iron aluminum was traded around RMB 14,880/mt. SHFE 1308 aluminum contract prices opened higher, boosting market sentiment. This, coupled with limited spot aluminum in the market, sent prices in east China above RMB 14,700/mt. Prices in Shanghai were RMB 14,730/mt, but were higher at RMB 14,750/mt in Wuxi and Hangzhou due to short supply. Overall trading picked up slightly. In the afternoon, spot market was dominated by strong wait-and-see sentiment. Traders are bullish over aluminum prices this week.
The opening price of SHFE 1307 lead contract stood above RMB 14,000/mt on May 31 at RMB 14,040/mt due to the continued rallies in LME lead prices overnight, but lacked momentum to rise further as investors booked profits ahead of the weekend to move narrowly between RMB 13,990-14,030/mt. Prices finally ended the day at RMB 14,005/mt, up RMB 85/mt from a day earlier. Trading volumes fell 26 lots to 208 lots, while positions increased 12 lots to 2,092 lots. The jumping prices opened window for further increase next week.
In China’s spot lead markets, transactions were rare ahead of the weekend and on the last day of the months. Smelters were bullish to market outlook due to the SHFE lead gapping higher, and held prices firm. Chihong Zn & Ge was quoted at RMB 13,900/mt, with spot discounts of RMB 100/mt against the SHFE 1307 lead contract price, but traded prices were mainly around RMB 13,870/mt. Quotes for Hanjiang were at RMB 13,860/mt. Most investors only stayed on the sidelines.
SHFE 1309 zinc contract prices opened higher at RMB 14,780/mt, boosting by LME zinc prices overnight, and touching RMB 14,845/mt as longs rushed to the market, fluctuating between RMB 14,780-14,795/mt. Due to the weakening domestic stocks markets and LME zinc prices and pessimistic China’s official PMI, longs left the market after closing positions, pushing down SHFE zinc prices to RMB 14,745-14,765/mt, finally closing at RMB 14,760/mt, up RMB 110/mt or 0.79%. Trading volumes decreased by 60,714 lots, to 88,426 lots, and total positions decreased by 8 lots to 170,328 lots.
Spot premiums of #0 zinc against SHFE 1309 zinc contract prices were RMB -40-30/mt, with traded prices between RMB 14,740-14,800/mt. #1 zinc prices were between RMB 14,740-14,750/mt. Cargo holders moved goods actively due to soaring zinc prices, but supply of Shuangyan brand remained tight, with prices between RMB 14,780-14,800/mt. Supply of Baohui, Shuikoushan and Qinxin brands were recently ample, with prices between RMB 14,740-14,750/mt. Downstream buying interest was low, keeping overall transactions muted. In the afternoon, SHFE zinc prices fluctuated narrowly, with price of #0 zinc RMB 10/mt below or RMB 40/mt higher than SHFE 1309 zinc contract prices, and traded prices between RMB 14,740-14,790/mt.
Mainstream traded prices for spot tin in Shanghai were between RMB 143,500-145,000/mt last Friday. Yunshan, Yunxiang, and Nanshan were mainly traded at RMB 143,500/mt, while traded prices for Yunheng were RMB 144,000-144,500/mt. Deals for Yunxi were done at RMB 144,500-145,000/mt. Spot tin prices remained relatively stable, but trading still showed no improvements. Buying interest is expected to be higher this week due to replenishments ahead of the Dragon Boat Festival.
In Shanghai, Jinchuan nickel prices were between RMB 105,000-105,100/mt in the morning session, while Russian nickel prices were between RMB 104,000-104,100/mt. Both downstream buyers and traders lacked buying interest prior to the weekend, while investors also lacked arbitrage opportunities, keeping transactions muted.