SMM Copper Market Daily Review (2013-6-14)

SHANGHAI, Jun. 17 (SMM) – SHFE 1310 copper contract started Friday RMB 170/mt lower at RMB 51,500/mt due to the decline in LME copper Thursday. After its opening, the most active SHFE copper contract was pushed up to RMB 51,720/mt by position liquidation before sinking to RMB 51,250/mt. In the afternoon session, SHFE copper for October delivery gained traction from the rally of the Shanghai Composite Index to hover around the daily moving average, and finally closed the session at RMB 51,450/mt, down RMB 220/mt or 0.43%. Trading volumes were off 101,000 lots, and positions added 8,970 lots. Investors largely sold at high and bought at low. The most active SHFE copper contract is vulnerable to losses in the near future. 

 

Spot copper in Shanghai was offered at a discount of RMB 0-130/mt and a premium of RMB 0-50/mt over SHFE 1306 copper contract prices on Friday. Traded prices for standard-quality copper were between RMB 52,300-52,380/mt, and RMB 52,400-52,500/mt for high-quality copper. SHFE 1310 copper contract prices extended losses. The price gap between SHFE 1306 and SHFE 1307 copper contracts expanded to RMB 400/mt due to approaching delivery of SHFE 1306 copper contracts. The massive inflows of imported copper forced cargo holders to cut offers. Goods were sold at discount near mid-day break. Middlemen entered the market for arbitrage, while downstream producers purchased to need. Cargo holders continued to sell goods for cash flows with spot copper quoted at discounts of RMB 20-160/mt. Traded prices remained little changed from the morning trading session. SHFE copper inventories increased 1,938 mt last week, leaving copper market in surplus.