SHANGHAI, Jun. 7 (SMM) –
SHFE 1310 copper contract started Thursday RMB 110/mt lower at RMB 53,200/mt as LME copper pulled back after hitting high last night. After its opening, the most active SHFE copper contract stabilized at the daily moving average, but failed to touch the 60-day moving average. In the afternoon, SHFE copper for October delivery was weighted down by plummeting Shanghai Composite Index to RMB 52,710/mt, and finally ended the day at RMB 52,900/mt, down RMB 410/mt or 0.77%. Trading volumes and positions were up 181,000 lots and 31,244 lots, respectively. Resistance remains strong at the 60-day moving average and copper prices are facing selling pressure at highs.
Spot copper in Shanghai was offered at a discount of RMB 0-70 and premium of RMB 0-120/mt over SHFE 1306 copper contract prices on Thursday. Traded prices for standard-quality copper were between RMB 53,750-53,850/mt, and RMB 53,800-54,030/mt for high-quality copper. SHFE 1309 copper contract prices were range-bound. Holders of imported copper rushed to sell for cash by lowering premium. Standard-quality copper was sold at discount. Prices of imported high-quality copper were flat with or slightly higher than SHFE 1306 copper contract prices, but RMB 100/mt lower than domestic high-quality copper. Prices of Guixi brand copper remained high, leaving little room for arbitrage. Downstream producers purchased based on orders at RMB 54,000/mt, with no massive pre-holiday restocking reported. In the afternoon, premiums for spot copper remained little changed at RMB 50-100/mt given ample supplies, and traded prices fell to RMB 53,450-53,850/mt.
SHFE 1309 aluminum contract opened only RMB 15/mt higher at RMB 14,925/mt on Thursday. The most active SHFE aluminum contract sank to RMB 14,840/mt shortly after its opening as longs closed positions against depressed economic outlook. Later, SHFE aluminum for September delivery rebounded as shorts exited to avoid risks ahead of the upcoming three-day holiday in China, but still failed to break through RMB 15,000/mt as positions fell as much as 5,844 lots. Finally, SHFE aluminum for delivery in four months closed flat with yesterday at RMB 14,910/mt. Today is the last trading day before the Chinese Dragon Boat Festival. Markets are now eyeing US May non-farm payrolls. Investors should continue to pull out of the market during the Asian trading session to avert risks. In this context, SHFE aluminum for September delivery is expected to hover near RMB 14,900/mt today.
Spot aluminum was traded at RMB 14,920-14,940/mt in Shanghai on Thursday, 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 15,050/mt. SHFE aluminum prices rose, with SHFE 1306 aluminum contract prices sustaining a 10-day winning streak. This allowed traders to hold prices flat with SHFE current-month aluminum contract prices, sending spot aluminum in east China up to RMB 14,900/mt, a 4-month high. Downstream producers restocked in modest amounts as the Chinese Drag Boat Festival is approaching, while middlemen went bargain hunting. This, coupled with tight aluminum supply, pushed prices up further. Trading was brisk at RMB 14,930/mt. Market activity should remain brisk today. In the afternoon, SHFE 1309 aluminum contract inched down, weakening market optimism. Some traders cut offers from RMB 14,930/mt to RMB 14,910/mt, but most buyers stood on the sidelines, except for a small number of middlemen who went bargain hunting.
SHFE 1306 lead contract again became the most active one as positions for SHFE 1307 lead contract price dropped rapidly on June 6. Prices for the most active contract gapped lower at RMB 14,050/mt due to decline in LME lead prices overnight and hovered around the opening prices. Later, as the LME lead prices slumped USD 20/mt, SHFE 1306 lead contract price fell RMB 40/mt to move between RMB 14,000-14,040/mt, but gained support at the 5-day moving average before ending the day at RMB 14,025/mt, down RMB 95/mt from a day earlier. Trading volumes for SHFE 1306 lead contract fell 118 lots to 104 lots, while positions were 1,834 lots.
Spot lead markets in China were dominated by wait-and-see mood. Traded price for Chihong Zn & Ge were reported at RMB 13,960-13,970/mt, with spot discounts of RMB 100/mt over the SHFE 1306 lead contract price. Prices for Dongling and Hanjiang were RMB 13,950-13,960/mt, while goods from Wanyang were traded at RMB 13,925/mt. Smelters continued to hold prices firm, while downstream buyers returned cautious with only two trading days left before the Chinese Dragon Boat Festival. Trading was quite on the whole.
SHFE 1309 zinc contract prices opened at RMB 14,865/mt, dipping before rallying and touching RMB 14,885/mt, and then fluctuating between RMB 14,855-14,865/mt. As selling pressure increased due to weakening LME zinc prices, SHFE zinc prices dipped to RMB 14,810/mt, with support from the 5 and 60-day moving average, but gaining back some losses, finally closing at RMB 14,845/mt, down RMB 30/mt or 0.2%. Trading volumes of SHFE 1309 zinc contracts decreased by 10,834 lots, to 62,118 lots, and positions decreased by 9,370 lots to 123,858 lots. Trading volumes decreased by 25,104 lots, to 108,510 lots, and total positions decreased by 16,476 lots to 293,776 lots. SHFE 1309 zinc contract prices struggled around the 60-day moving average, with the fluctuation range of RMB 75/mt. Market players will remain cautious before the weekend.
SHFE zinc prices opened slightly lower today, surging before falling. #0 zinc prices ranged from RMB 20/mt below to RMB 10/mt above SHFE 1309 zinc contract prices, with traded prices between RMB 14,840-14,870/mt. #1 zinc prices were between RMB 14,810-14,830/mt. Cargo holders were actively moving goods due to higher prices, but downstream buying interest remained low, keeping transactions quiet. SHFE zinc prices inched down in the afternoon, with #0 zinc prices ranging from RMB 20/mt below to RMB 20/mt above SHFE 1309 zinc contract prices, and with traded prices between RMB 14,800-14,860/mt.
Spot tin prices in Shanghai continued to fall on Thursday to RMB 142,000-143,800/mt. Cargo holders lowered prices for sales given thin trading, but transactions remained sparse. Some goods of Nanshan were traded at RMB 142,000/mt or even quoted lower at RMB 141,500/mt, adding to drags on prices.
In Shanghai, Jinchuan nickel prices were between RMB 106,900-107,100/mt, while Russian nickel prices were between RMB 105,900-106,100/mt. Due to the lack of arbitrage opportunity and weak downstream buying interest, transactions were still muted.