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SMM Base Metals Market Daily Review (2013-6-5)
Jun 6,2013 13:00CST
price review forecast
Bolstered by soaring LME copper last night, SHFE 1309 copper contract started Wednesday RMB 290/mt higher at RMB 53,350/mt.
SHANGHAI, Jun. 6 (SMM) – 
Bolstered by soaring LME copper last night, SHFE 1309 copper contract started Wednesday RMB 290/mt higher at RMB 53,350/mt. After its opening, the intense struggle between longs and shorts kept the most active SHFE copper contract hovering near the daily moving average, with resistance at the 60-day moving average and vulnerable at RMB 53,250/mt. At the tail of the session, SHFE copper for September delivery leaped to an intraday high of RMB 53,650/mt thanks to rising LME copper, and finally finished at RMB 53,640/mt, up RMB 580/mt or 1.09%. SHFE 1310 copper contract ended the day RMB 570/mt or 1.08% higher at RMB 53,520/mt, with its high-end and low-end prices at RMB 53,550/mt and RMB 53,130/mt, respectively. Trading volumes and positions of SHFE 1310 copper contracts were up 76,576 lots and 12,002 lots, respectively. Total trading volumes and positions increased 79,490 lots and 1,196 lots, respectively. SHFE 1310 copper contracts became the most active one today. Although resistance remains strong at the 60-day moving average, support level has advanced to RMB 52,800/mt. 
Spot copper in Shanghai was offered at a premium of RMB 0-180/mt over SHFE 1306 copper contract prices on Wednesday. Traded prices for standard-quality copper were between RMB 53,800-53,900/mt, and RMB 53,900-54,060/mt for high-quality copper. SHFE 1309 copper contract prices failed to rebound, prompting cargo holders to sell at highs for cash. Premium slid all the way down due to ample supply. Prices of high-quality copper were firm, though, especially Guixi brand. Offers of imported standard-quality copper were flat with SHFE 1306 copper contract prices towards mid-day, while hydrometallurgical copper was sold at discount. Middlemen tried to push for lower prices, while downstream producers refrained from buying at RMB 54,000/mt. Premiums for spot copper continued to fall in the afternoon to RMB 20-150/mt, with traded prices up slightly to RMB 53,800-54,100/mt. No transaction was made in the afternoon.
SHFE 1309 aluminum contract opened slightly higher at RMB 14,895/mt on Wednesday. In the morning session, the most active SHFE aluminum contract failed to break through RMB 14,900/mt on lackluster trading activity, but its downside space was seen limited, though, with the low-end price at RMB 14,870/mt. In the afternoon session, SHFE aluminum for September delivery bounced back as shorts exited after LME aluminum led gains.  Finally, SHFE 1309 aluminum contract closed at an intraday high of RMB 14,970/mt, up RMB 115/m or 0.77%. Positions decreased 1,194 lots to 47,558 lots. The most active SHFE aluminum contract is expected to challenge RMB 15,000/mt as spot aluminum supply is tight and as LME aluminum recorded a 7-day winning streak.
Spot aluminum was traded at RMB 14,850-14,860/mt in Shanghai on Wednesday, a discount of RMB 0-10/mt and premium of RMB 0-10/mt over SHFE 1306 aluminum contract prices. Low-iron aluminum was traded around RMB 14,980/mt. The high-end SHFE 1306 aluminum contract prices rose, allowing traders to hold offers level with SHFE current-month aluminum contract prices. Downstream producers began to restock modestly for the upcoming Chinese Drag Boat Festival and middlemen were also active in buying, keeping mainstream traded prices stable at RMB 14,850/mt. Overall trading picked up slightly from a day earlier. In the afternoon, the most active SHFE aluminum contract staged a strong rally, driving traders to hike quotes from RMB 14,860/mt to RMB 14,880/mt. Middlemen shied away from higher prices, leaving trading muted.    
The most active SHFE 1307 lead contract price opened RMB 75/mt higher at RMB 14,165/mt on June 5 due to rising LME lead prices, and hovered below RMB 14,160/mt with few economic data reported. In the afternoon trading session, as the Shanghai Composite Index stopped falling and regained some losses and LME lead prices continued to rally, SHFE 1307 lead contract price rose to move around RMB 14,170/mt and ended at RMB 14,195/mt, up RMB 95/mt. Market was overtaken by wait-and-see sentiment. Trading volumes fell 362 lots to 256 lots, and positions fell 10 lots to 1,812 lots. 
Spot lead prices in China rose RMB 30/mt due to limited supplies in Shanghai. Chihong Zn & Ge was quoted at RMB 13,980/mt, with spot discounts of RMB 70/mt over the most active SHFE lead contract price. Hanjiang was offered at RMB 13,950/mt. With spot lead prices approaching RMB 14,000/mt, bullish smelters hold quotes high. Buying interest among downstream buyers improved slightly and traders increased purchases with optimistic outlook. SHFE lead rose further in the afternoon, but quotes in spot lead markets were rare and remained little changed from the morning trading session.
SHFE 1309 zinc contract prices opened higher at RMB 14,870/mt, boosted by LME zinc prices overnight. Both the Shanghai Composite Index and LME zinc prices dipped before rallying, so SHFE zinc prices inched down in the morning session, dipping to RMB 14,840/mt, and finding support at the 60-day moving average. In the afternoon, SHFE zinc prices advanced, touching RMB 14,930/mt, closing at RMB 14,915/mt, up RMB 65/mt or 0.44%. Trading volumes of SHFE 1309 zinc contracts decreased by 19,314 lots, to 72,952 lots, and positions decreased by 11,304 lots to 133,228 lots. Trading volumes decreased by 25,784 lots, to 133,614 lots, and total positions decreased by 24,008 lots to 310,252 lots. The SHFE/LME zinc price ratio slid slightly due to weaker domestic zinc prices, causing investors to close positions, with 22.39% of shorts leaving the market. Market players were cautious prior to the release of US ADP job data.
SHFE zinc prices opened slightly higher today but later fell. #0 zinc prices ranged from RMB 10/mt below to RMB 10/mt above SHFE 1309 zinc contract prices, with traded prices between RMB 14,840-14,880/mt. #1 zinc prices were between RMB 14,800-14,830/mt. Market was cautious, with long momentum weakening and large numbers of investors closing positions. Profit seekers entered the market when prices rose, and downstream buying replenished stocks modestly, but overall transactions remained quiet due to pessimism and weakening SHFE zinc prices. in the afternoon, SHFE zinc prices gained momentum, with spot discounts of #0 zinc against SHFE 1309 zinc contract prices between RMB 20-0/mt, with traded prices between RMB 14,860-14,890/mt.
On June 5, traded prices in Shanghai tin market remained little changed from the previous trading day at RMB 142,500-144,000/mt in the morning. Trading was still thin as downstream buyers did not replenish goods despite the upcoming Chinese Dragon Boat Festival. In the afternoon, prices for some Jiangxi’s brands fell further to RMB 142,000/mt, but transactions were still sparse. 
In Shanghai, Jinchuan nickel prices were between RMB 107,000-107,200/mt in the morning session, while Russian nickel prices were between RMB 106,000-106,200/mt. As LME nickel prices climbed, Jinchuan nickel prices rose to RMB 107,300/mt, and Russian nickel prices also edged up to RMB 106,300/mt. Due to downstream caution and some traders holding back goods, transactions were still muted.


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