SHANGHAI, Jun. 8 (SMM) – SHFE 1310 copper contract started Friday RMB 110/mt lower at RMB 52,980/mt as LME copper extended losses last night. After its opening, the most active SHFE copper contract swung violently before testing support at RMB 52,700/mt. Later, SHFE copper for October delivery bounced back to above the daily moving average, but was again weighed down by a 1.5% decline in the Shanghai Composite Index. SHFE 1310 copper contract did regain most of earlier losses at the tail of trading and hit RMB 53,150/mt due to position liquidation, and finally ended the day at RMB 53,050/mt, down RMB 40/mt or 0.08%. Trading volumes and positions contracted 101,000 lots and 12,460 lots, respectively. The most active SHFE copper contract moved between the 5-day and 20-day moving averages due to strong pre-holiday risk aversion, and LME copper prices during the three-day holiday in China will provide direction for post-holiday SHFE copper prices.
Spot copper in Shanghai was offered at a discount of RMB 0-80 and premium of RMB 0-100/mt over SHFE 1306 copper contract prices on Friday. Traded prices for standard-quality copper were between RMB 53,400-53,550/mt, and RMB 53,500-53,700/mt for high-quality copper. SHFE 1310 copper contract prices inched down. Spot copper supply was plentiful and premium was stable. Some middlemen entered the market in the morning, but downstream producers continued to purchase based on orders. Spot copper was quoted at discount of RMB 50/mt to premiums of RMB 60/mt in the afternoon, with traded prices at RMB 53,450-53,600/mt, but trading was quiet. SHFE copper inventories increased 2,155 mt to 181,472 mt during the past week. Consumption remained soft given the large amount of imports and limited pre-holiday replenishments despite the upcoming holiday.