SMM Base Metals Daily Review (2013-6-25)-Shanghai Metals Market

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SMM Base Metals Daily Review (2013-6-25)

Price Review & Forecast 10:10:09AM Jun 26, 2013 Source:SMM
SHANGHAI, Jun. 26 (SMM) – 
 
Copper
SHFE 1310 copper contract opened RMB 520/mt lower at RMB 48,100/mt on Tuesday. China’s A-shares tumbled more than 5% for two consecutive days to 1,849 points, keeping copper prices in check. On the other hand, some short sellers took profits, preventing copper prices from falling. The most active SHFE copper contract, however, sank to RMB 47,560/mt in the afternoon session as LME copper dropped to USD 6,000/mt. Later, SHFE copper for October delivery rose to RMB 48,950/mt due to position liquidation, and finally closed at RMB 48,580/mt, down RMB 40/mt or 0.08%, with trading volumes up 193,000 lots and positions down 45,104 lots. SHFE copper is still under downward track. 
 
Spot copper in Shanghai was offered at a premium of RMB 30-150/mt over SHFE 1307 copper contract prices on Tuesday. Traded prices for standard-quality copper were between RMB 48,650-48,880/mt, and RMB 48,700-49,050/mt for high-quality copper. SHFE 1310 copper contract extended losses. The SHFE/LME copper price ratio fell sharply, resulting in less imported copper available in the market. Spot premium, however, actually fell as cargo holders were anxious to sell for cash at the month’s end. Downstream producers bought to need at low prices. Market panic will remain. Premiums for spot copper narrowed in the afternoon trading session to RMB 20-120/mt, with traded prices at RMB 48,450-49,150/mt.
 
Aluminum
SHFE 1310 aluminum contract opened RMB 15/mt higher at RMB 14,300/mt on Tuesday. In the morning session, depressed trading activity and falling A-shares in China pushed the most active SHFE aluminum contract down to RMB 14,250/mt. In the afternoon session, A-shares plunged 5.7%, driving SHFE aluminum for October delivery down to RMB 14,180/mt. Later, SHFE 1310 aluminum contract recouped some of its earlier losses as the rally in A-shares prompted shorts to pull out of the market, and finally closed up RMB 20/mt or 0.14% at RMB 14,305/mt. Trading volumes increased 1,738 lots to 12,164 lots, and positions added 1,432 lots to 68,396 lots. SHFE aluminum market will be characterized by buying at lows and selling at highs given the tight liquidity at the end of mid-year, which will leave the most actively traded SHFE aluminum contract hovering at RMB 14,300/mt. 
 
Mainstream traded prices for spot aluminum in Shanghai were RMB 14,390-14,410/mt, a premium of RMB 0-20/mt over SHFE 1307 aluminum contract prices. Low-iron aluminum was traded around RMB 14,550/mt. China’s A-shares continued to drop, adding to market pessimism. SHFE aluminum fell only slightly, though. Traders held offers at RMB 14,400/mt, while downstream producers purchased in modest amounts before liquidity tightens further. Some quoted at below RMB 14,400/mt against limited demand and tight cash flows. Buying interest is expected to dwindle further next week. In the afternoon, wait-and-see sentiment dominated spot market, with a few deals done at RMB 14,380-14,400/mt. 
 
Lead
With China further tightening control over monetary policy and Fed expected to wind down the QE, Shanghai Composite Index dipped below 1,900 on Tuesday, but narrowed the declines to 0.19% in the afternoon following the press conference about market liquidity held by major financial authorities. SHFE 1309 lead contract price opened at RMB 13,950/mt and hit a new 2013 low of RMB 13,820/mt, but regained some losses along with domestic stocks to finally close at RMB 13,900/mt, down RMB 15/mt from a day earlier. Trading volumes were down 126 lots to 180 lots, and positions increased 36 lots to 1,820 lots. Settlement price for the SHFE 1309 lead contract price was RMB 13,879/mt. 
 
SHFE lead prices moved around RMB 13,900/mt on Tuesday due to the slipping Chinese stocks. In China’s spot lead markets, buying interest was undermined due to bearishness. Chihong Zn & Ge was offered at RMB 13,790/mt, little changed from the previous trading day and with discount of RMB 110/mt over the SHFE 1309 lead contract price, but transactions were limited. Hanjiang and Nanfang were quoted at RMB 13,720/mt. Trading was quiet on the whole as buyers believe prices will fall further. Most investors stayed out of the market in the afternoon.
 
Zinc
SHFE 1310 zinc contract prices opened RMB 40/mt lower at RMB 14,310/mt, as LME zinc prices overnight closed the day with sharp declines. The Shanghai Composite Index opened low and moved lower, dipping to 14,310, and depressing market sentiment. Financial markets and commodity prices dropped in response, but SHFE zinc prices were resistant to declines due to cost support, fluctuating around RMB 14,310/mt in the morning. Rumors circulated that the State Council required financial institutions to submit plans to revolve money shortfalls, while Shanghai held the 2013 Lujiazui Forum press conference. In this context, the Shanghai Composite Index rebounded, and finally closed down 0.19%. LME zinc prices challenged the 5-day moving average, boosting market confidence, so SHFE zinc prices rallied in the afternoon, touching RMB 14,420/mt, finally closing at RMB 14,380/mt, up RMB 30/mt or 0.21%. Trading volumes increased by 7,878 lots, to 80,096 lots, and total positions increased by 1,708 lots to 147,622 lots.
 
#0 zinc prices were between RMB 14,420-14,450/mt, with spot premiums between RMB 90-110/mt against SHFE 1310 zinc contract prices. #1 zinc prices were around RMB 14,410/mt. SHFE zinc prices opened lower and then fluctuated narrowly, and domestic stocks markets extended declines, with the Shanghai Composite Index losing 1,900 level, and with declines expanding to 3.6% by 11:30 AM. Downstream buying interest was low, while traders were depressed as SHFE zinc prices moved narrowly, and smelters were actively moving goods, but with transactions muted. SHFE zinc prices rose in the afternoon, and #0 zinc prices advanced to RMB 14,440-14,470/mt, with spot premiums narrowing to RMB 80-90/mt against SHFE 1310 zinc contract prices.
 
Tin
Traded prices for spot tin in Shanghai were mainly at RMB 138,000-139,500/mt on Tuesday, with Jiangxi’s brands traded at RMB 138,000/mt. Transactions for Jinhai were made at RMB 138,500/mt while deals for Yunxi and Yunheng were made at RMB 139,000-139,500/mt. LME tin prices continued to fall in Asian trading hours, hurting market confidence and leaving consumption soft. In the afternoon, some holders of low-priced goods were unwilling to move goods due to the rebound of LME tin, curtailing supplies, but trading activity remained dull. 

Nickel
In Shanghai, Jinchuan nickel prices were around RMB 96,900/mt in the morning, and Russian nickel prices were around RMB 95,900/mt. The market lacked confidence as LME nickel prices opened low and moved lower, with transactions muted. Jinchuan nickel prices dropped to nearly RMB 96,500/mt later in the day, and Russian nickel prices fell to RMB 95,500/mt. As LME nickel prices rebounded, domestic spot prices edged up, but traders were unwilling to sell goods, keeping transactions muted.
 
 
 

SMM Base Metals Daily Review (2013-6-25)

Price Review & Forecast 10:10:09AM Jun 26, 2013 Source:SMM
SHANGHAI, Jun. 26 (SMM) – 
 
Copper
SHFE 1310 copper contract opened RMB 520/mt lower at RMB 48,100/mt on Tuesday. China’s A-shares tumbled more than 5% for two consecutive days to 1,849 points, keeping copper prices in check. On the other hand, some short sellers took profits, preventing copper prices from falling. The most active SHFE copper contract, however, sank to RMB 47,560/mt in the afternoon session as LME copper dropped to USD 6,000/mt. Later, SHFE copper for October delivery rose to RMB 48,950/mt due to position liquidation, and finally closed at RMB 48,580/mt, down RMB 40/mt or 0.08%, with trading volumes up 193,000 lots and positions down 45,104 lots. SHFE copper is still under downward track. 
 
Spot copper in Shanghai was offered at a premium of RMB 30-150/mt over SHFE 1307 copper contract prices on Tuesday. Traded prices for standard-quality copper were between RMB 48,650-48,880/mt, and RMB 48,700-49,050/mt for high-quality copper. SHFE 1310 copper contract extended losses. The SHFE/LME copper price ratio fell sharply, resulting in less imported copper available in the market. Spot premium, however, actually fell as cargo holders were anxious to sell for cash at the month’s end. Downstream producers bought to need at low prices. Market panic will remain. Premiums for spot copper narrowed in the afternoon trading session to RMB 20-120/mt, with traded prices at RMB 48,450-49,150/mt.
 
Aluminum
SHFE 1310 aluminum contract opened RMB 15/mt higher at RMB 14,300/mt on Tuesday. In the morning session, depressed trading activity and falling A-shares in China pushed the most active SHFE aluminum contract down to RMB 14,250/mt. In the afternoon session, A-shares plunged 5.7%, driving SHFE aluminum for October delivery down to RMB 14,180/mt. Later, SHFE 1310 aluminum contract recouped some of its earlier losses as the rally in A-shares prompted shorts to pull out of the market, and finally closed up RMB 20/mt or 0.14% at RMB 14,305/mt. Trading volumes increased 1,738 lots to 12,164 lots, and positions added 1,432 lots to 68,396 lots. SHFE aluminum market will be characterized by buying at lows and selling at highs given the tight liquidity at the end of mid-year, which will leave the most actively traded SHFE aluminum contract hovering at RMB 14,300/mt. 
 
Mainstream traded prices for spot aluminum in Shanghai were RMB 14,390-14,410/mt, a premium of RMB 0-20/mt over SHFE 1307 aluminum contract prices. Low-iron aluminum was traded around RMB 14,550/mt. China’s A-shares continued to drop, adding to market pessimism. SHFE aluminum fell only slightly, though. Traders held offers at RMB 14,400/mt, while downstream producers purchased in modest amounts before liquidity tightens further. Some quoted at below RMB 14,400/mt against limited demand and tight cash flows. Buying interest is expected to dwindle further next week. In the afternoon, wait-and-see sentiment dominated spot market, with a few deals done at RMB 14,380-14,400/mt. 
 
Lead
With China further tightening control over monetary policy and Fed expected to wind down the QE, Shanghai Composite Index dipped below 1,900 on Tuesday, but narrowed the declines to 0.19% in the afternoon following the press conference about market liquidity held by major financial authorities. SHFE 1309 lead contract price opened at RMB 13,950/mt and hit a new 2013 low of RMB 13,820/mt, but regained some losses along with domestic stocks to finally close at RMB 13,900/mt, down RMB 15/mt from a day earlier. Trading volumes were down 126 lots to 180 lots, and positions increased 36 lots to 1,820 lots. Settlement price for the SHFE 1309 lead contract price was RMB 13,879/mt. 
 
SHFE lead prices moved around RMB 13,900/mt on Tuesday due to the slipping Chinese stocks. In China’s spot lead markets, buying interest was undermined due to bearishness. Chihong Zn & Ge was offered at RMB 13,790/mt, little changed from the previous trading day and with discount of RMB 110/mt over the SHFE 1309 lead contract price, but transactions were limited. Hanjiang and Nanfang were quoted at RMB 13,720/mt. Trading was quiet on the whole as buyers believe prices will fall further. Most investors stayed out of the market in the afternoon.
 
Zinc
SHFE 1310 zinc contract prices opened RMB 40/mt lower at RMB 14,310/mt, as LME zinc prices overnight closed the day with sharp declines. The Shanghai Composite Index opened low and moved lower, dipping to 14,310, and depressing market sentiment. Financial markets and commodity prices dropped in response, but SHFE zinc prices were resistant to declines due to cost support, fluctuating around RMB 14,310/mt in the morning. Rumors circulated that the State Council required financial institutions to submit plans to revolve money shortfalls, while Shanghai held the 2013 Lujiazui Forum press conference. In this context, the Shanghai Composite Index rebounded, and finally closed down 0.19%. LME zinc prices challenged the 5-day moving average, boosting market confidence, so SHFE zinc prices rallied in the afternoon, touching RMB 14,420/mt, finally closing at RMB 14,380/mt, up RMB 30/mt or 0.21%. Trading volumes increased by 7,878 lots, to 80,096 lots, and total positions increased by 1,708 lots to 147,622 lots.
 
#0 zinc prices were between RMB 14,420-14,450/mt, with spot premiums between RMB 90-110/mt against SHFE 1310 zinc contract prices. #1 zinc prices were around RMB 14,410/mt. SHFE zinc prices opened lower and then fluctuated narrowly, and domestic stocks markets extended declines, with the Shanghai Composite Index losing 1,900 level, and with declines expanding to 3.6% by 11:30 AM. Downstream buying interest was low, while traders were depressed as SHFE zinc prices moved narrowly, and smelters were actively moving goods, but with transactions muted. SHFE zinc prices rose in the afternoon, and #0 zinc prices advanced to RMB 14,440-14,470/mt, with spot premiums narrowing to RMB 80-90/mt against SHFE 1310 zinc contract prices.
 
Tin
Traded prices for spot tin in Shanghai were mainly at RMB 138,000-139,500/mt on Tuesday, with Jiangxi’s brands traded at RMB 138,000/mt. Transactions for Jinhai were made at RMB 138,500/mt while deals for Yunxi and Yunheng were made at RMB 139,000-139,500/mt. LME tin prices continued to fall in Asian trading hours, hurting market confidence and leaving consumption soft. In the afternoon, some holders of low-priced goods were unwilling to move goods due to the rebound of LME tin, curtailing supplies, but trading activity remained dull. 

Nickel
In Shanghai, Jinchuan nickel prices were around RMB 96,900/mt in the morning, and Russian nickel prices were around RMB 95,900/mt. The market lacked confidence as LME nickel prices opened low and moved lower, with transactions muted. Jinchuan nickel prices dropped to nearly RMB 96,500/mt later in the day, and Russian nickel prices fell to RMB 95,500/mt. As LME nickel prices rebounded, domestic spot prices edged up, but traders were unwilling to sell goods, keeping transactions muted.