SMM Base Metals Daily Review (2013-6-26)-Shanghai Metals Market

Hot Keywords

  • Inventory data
  • Zinc
  • Production data
  • Market commentary
  • Macroeconomics
  • Morning comments
  • Futures movement
  • NPI
  • Copper
  • Aluminium
  • Nickel
  • Nickel ore
  • In the United States
  • trade negotiations
  • nickel laterite

SMM Base Metals Daily Review (2013-6-26)

Price Review & Forecast 09:54:15AM Jun 27, 2013 Source:SMM
SHANGHAI, Jun. 27 (SMM) – 

Copper
SHFE 1310 copper contract opened RMB 1,030/mt lower at RMB 49,230/mt on Wednesday. After its opening, the most active SHFE copper contract moved lower due to short selling and since longs exited the market. In the afternoon, SHFE copper for October delivery fell further to RMB 47,960/mt as LME copper retreated from USD 6,700/mt. Finally, SHFE 1310 copper contract shed RMB 140/m or 0.29% to end at RMB 48,060/mt, with trading volumes down 185,000 lots and positions up 20,694 lots. Trading volumes of SHFE copper exceeded 1 million lots for three consecutive days, with turnover rate at above 230%, a sign of active trading activity. Support at RMB 48,000/mt remains to be tested. 
 
Spot copper in Shanghai was offered at a discount of RMB 0-100/mt and premium of RMB 0-40/mt over SHFE 1307 copper contract prices on Wednesday. Traded prices for standard-quality copper were between RMB 48,820-49,350/mt, and RMB 48,900-49,500/mt for high-quality copper. SHFE 1310 copper contract opened almost RMB 1,000/mt higher. Car holders cut quotes against tepid demand. Quotations were lower than SHFE 1307 copper contract prices after the most active SHFE copper contract gave back all the gains made during the morning session, with high-quality copper offered at RMB 20/mt lower than SHFE current-month copper contract. Middlemen and downstream producers largely refrained from buying against tightening liquidity. SHFE copper prices fell further in the afternoon, and spot copper was still quoted at discount of RMB 0-120/mt. Traded prices were down to RMB 48,700-49,050/mt.
 
Aluminum
SHFE 1310 aluminum contract opened higher at RMB 14,330/mt on Wednesday. However, the most active SHFE aluminum contract followed other base metals down as longs were pessimistic and as A-shares extended losses. Finally, SHFE aluminum for October delivery closed at RMB 14,240/mt, down RMB 20/mt or 0.14%. Trading volumes contracted 3,722 lots to 8,442 lots, but positions increased 1,470 lots to 69,866 lots. SHFE 1310 aluminum contract is capped under the 5-day moving average due to market pessimism, and is expected to hold stable at RMB 14,200/mt at the bottom. 
 
Mainstream traded prices for spot aluminum in Shanghai were RMB 14,370-14,400/mt, a premium of RMB 0-20/mt over SHFE 1307 aluminum contract prices. Low-iron aluminum was traded around RMB 14,540/mt. Falling A-shares caused SHFE 1310 aluminum contract to move lower after a high opening, souring sentiment in spot market. Cargo holders cut offers, but lower prices failed to stoke downstream buying interest, sending mainstream traded prices down below RMB 14,400/mt. In the afternoon, falling SHFE aluminum triggered stronger wait-and-see sentiment in spot market. A few traders held quotations at RMB 14,370-14,390/mt, but trading was muted.  
 
Lead
SHFE 1309 lead contract price opened at RMB 13,905/mt on June 26 despite the over 2% increase in LME lead prices overnight, and moved around RMB 13,900/mt. In the afternoon, as Chinese stock markets responded mildly to the liquidity injection by the People’s Bank of China on Tuesday and continued the downtrend and LME lead prices gave back earlier gains, SHFE 1309 lead contract price fell RMB 10-20/mt to RMB 13,875-13,895/mt, and finally ended at RMB 13,870/mt, down RMB 30/mt. Trading volumes for the contract for September delivery fell 58 lots to 122 lots, and positions increased 50 lots to 1,870 lots. SHFE lead prices are expected to hover at RMB 13,850-13,950/mt given the weakness in Chinese stock markets.
 
Spot lead prices in China were little changed from the previous trading day. Chihong Zn & Ge was traded at RMB 13,790/mt, with spot discounts of RMB 100/mt against the SHFE 1309 lead contract price. Nanfang was traded at RMB 13,730/mt, with discount of RMB 10/mt against the SHFE 1307 lead contract price. Shuikoushan was traded at RMB 13,750/mt, and Mengzi was traded at RMB 13,730/mt. Most downstream buyers were facing tight cash flow and limited purchases, leaving trading quiet. 
 
Zinc
SHFE 1310 zinc contract prices opened RMB 100/mt higher at RMB 14,435/mt, as LME zinc prices overnight closed the day with gains. The Shanghai Composite Index stopped rebounding and closed with declines of 0.41%, and LME zinc prices also inched down, with a large number of longs leaving the market. SHFE zinc prices touched USD 14,500/mt before falling, dipping to RMB 14,305/mt and finally closing at RMB 14,315/mt, down RMB 20/mt or 0.14%. Trading volumes decreased by 2,914 lots, to 77,182 lots, and total positions increased by 10,506 lots to 158,128 lots.
SHFE zinc prices found strong support at RMB 14,300/mt, but will continue to fall as copper prices remain sluggish and since domestic cash flows did not improve.
 
#0 zinc prices were between RMB 14,460-14,480/mt, with spot premiums between RMB 80-110/mt against SHFE 1310 zinc contract prices. #1 zinc prices were between RMB 14,410-14,430/mt. SHFE zinc prices opened high but moved lower, and domestic stocks markets were also sluggish, triggering market apprehension. Smelters were actively moving goods due to cash flow problem, but began to hold back goods as zinc prices fell, while downstream buyers are optimistic towards price trends and are faced with cash flow tightness, so they stood on the sidelines, keeping transactions muted. SHFE zinc prices continued to fall in the afternoon, while cargo holders held #0 zinc prices firm between RMB 14,450-14,460/mt, with spot premiums expanding to RMB 120-130/mt.
 
Tin
Spot tin prices in Shanghai were mainly at RMB 138,000-139,000/mt, with brands from Jiangxi and goods of Feidie traded at RMB 137,700-137,800/mt. Market was dominated by wait-and-see sentiment. Downstream buyers cut purchases with the onset of low demand season, combined with falling prices, tin market was further dampened. LME tin prices managed to stabilize at USD 19,500/mt, but the support at this level was not strong, leaving room for further decline. China’s spot tin prices were waiting for guides from LME tin. 
 
Nickel
In Shanghai, Jinchuan nickel prices were around RMB 97,500/mt in the morning, and Russian nickel prices were around RMB 96,500/mt. As LME nickel prices dropped, Jinchuan nickel prices fell to RMB 97,100/mt, and Russian nickel prices sank to RMB 96,100/mt. Price fluctuations in Wuxi created arbitrage opportunities for traders, but transactions were quiet. Downstream buying interest was low due to falling prices and cash flow problem. 
 

SMM Base Metals Daily Review (2013-6-26)

Price Review & Forecast 09:54:15AM Jun 27, 2013 Source:SMM
SHANGHAI, Jun. 27 (SMM) – 

Copper
SHFE 1310 copper contract opened RMB 1,030/mt lower at RMB 49,230/mt on Wednesday. After its opening, the most active SHFE copper contract moved lower due to short selling and since longs exited the market. In the afternoon, SHFE copper for October delivery fell further to RMB 47,960/mt as LME copper retreated from USD 6,700/mt. Finally, SHFE 1310 copper contract shed RMB 140/m or 0.29% to end at RMB 48,060/mt, with trading volumes down 185,000 lots and positions up 20,694 lots. Trading volumes of SHFE copper exceeded 1 million lots for three consecutive days, with turnover rate at above 230%, a sign of active trading activity. Support at RMB 48,000/mt remains to be tested. 
 
Spot copper in Shanghai was offered at a discount of RMB 0-100/mt and premium of RMB 0-40/mt over SHFE 1307 copper contract prices on Wednesday. Traded prices for standard-quality copper were between RMB 48,820-49,350/mt, and RMB 48,900-49,500/mt for high-quality copper. SHFE 1310 copper contract opened almost RMB 1,000/mt higher. Car holders cut quotes against tepid demand. Quotations were lower than SHFE 1307 copper contract prices after the most active SHFE copper contract gave back all the gains made during the morning session, with high-quality copper offered at RMB 20/mt lower than SHFE current-month copper contract. Middlemen and downstream producers largely refrained from buying against tightening liquidity. SHFE copper prices fell further in the afternoon, and spot copper was still quoted at discount of RMB 0-120/mt. Traded prices were down to RMB 48,700-49,050/mt.
 
Aluminum
SHFE 1310 aluminum contract opened higher at RMB 14,330/mt on Wednesday. However, the most active SHFE aluminum contract followed other base metals down as longs were pessimistic and as A-shares extended losses. Finally, SHFE aluminum for October delivery closed at RMB 14,240/mt, down RMB 20/mt or 0.14%. Trading volumes contracted 3,722 lots to 8,442 lots, but positions increased 1,470 lots to 69,866 lots. SHFE 1310 aluminum contract is capped under the 5-day moving average due to market pessimism, and is expected to hold stable at RMB 14,200/mt at the bottom. 
 
Mainstream traded prices for spot aluminum in Shanghai were RMB 14,370-14,400/mt, a premium of RMB 0-20/mt over SHFE 1307 aluminum contract prices. Low-iron aluminum was traded around RMB 14,540/mt. Falling A-shares caused SHFE 1310 aluminum contract to move lower after a high opening, souring sentiment in spot market. Cargo holders cut offers, but lower prices failed to stoke downstream buying interest, sending mainstream traded prices down below RMB 14,400/mt. In the afternoon, falling SHFE aluminum triggered stronger wait-and-see sentiment in spot market. A few traders held quotations at RMB 14,370-14,390/mt, but trading was muted.  
 
Lead
SHFE 1309 lead contract price opened at RMB 13,905/mt on June 26 despite the over 2% increase in LME lead prices overnight, and moved around RMB 13,900/mt. In the afternoon, as Chinese stock markets responded mildly to the liquidity injection by the People’s Bank of China on Tuesday and continued the downtrend and LME lead prices gave back earlier gains, SHFE 1309 lead contract price fell RMB 10-20/mt to RMB 13,875-13,895/mt, and finally ended at RMB 13,870/mt, down RMB 30/mt. Trading volumes for the contract for September delivery fell 58 lots to 122 lots, and positions increased 50 lots to 1,870 lots. SHFE lead prices are expected to hover at RMB 13,850-13,950/mt given the weakness in Chinese stock markets.
 
Spot lead prices in China were little changed from the previous trading day. Chihong Zn & Ge was traded at RMB 13,790/mt, with spot discounts of RMB 100/mt against the SHFE 1309 lead contract price. Nanfang was traded at RMB 13,730/mt, with discount of RMB 10/mt against the SHFE 1307 lead contract price. Shuikoushan was traded at RMB 13,750/mt, and Mengzi was traded at RMB 13,730/mt. Most downstream buyers were facing tight cash flow and limited purchases, leaving trading quiet. 
 
Zinc
SHFE 1310 zinc contract prices opened RMB 100/mt higher at RMB 14,435/mt, as LME zinc prices overnight closed the day with gains. The Shanghai Composite Index stopped rebounding and closed with declines of 0.41%, and LME zinc prices also inched down, with a large number of longs leaving the market. SHFE zinc prices touched USD 14,500/mt before falling, dipping to RMB 14,305/mt and finally closing at RMB 14,315/mt, down RMB 20/mt or 0.14%. Trading volumes decreased by 2,914 lots, to 77,182 lots, and total positions increased by 10,506 lots to 158,128 lots.
SHFE zinc prices found strong support at RMB 14,300/mt, but will continue to fall as copper prices remain sluggish and since domestic cash flows did not improve.
 
#0 zinc prices were between RMB 14,460-14,480/mt, with spot premiums between RMB 80-110/mt against SHFE 1310 zinc contract prices. #1 zinc prices were between RMB 14,410-14,430/mt. SHFE zinc prices opened high but moved lower, and domestic stocks markets were also sluggish, triggering market apprehension. Smelters were actively moving goods due to cash flow problem, but began to hold back goods as zinc prices fell, while downstream buyers are optimistic towards price trends and are faced with cash flow tightness, so they stood on the sidelines, keeping transactions muted. SHFE zinc prices continued to fall in the afternoon, while cargo holders held #0 zinc prices firm between RMB 14,450-14,460/mt, with spot premiums expanding to RMB 120-130/mt.
 
Tin
Spot tin prices in Shanghai were mainly at RMB 138,000-139,000/mt, with brands from Jiangxi and goods of Feidie traded at RMB 137,700-137,800/mt. Market was dominated by wait-and-see sentiment. Downstream buyers cut purchases with the onset of low demand season, combined with falling prices, tin market was further dampened. LME tin prices managed to stabilize at USD 19,500/mt, but the support at this level was not strong, leaving room for further decline. China’s spot tin prices were waiting for guides from LME tin. 
 
Nickel
In Shanghai, Jinchuan nickel prices were around RMB 97,500/mt in the morning, and Russian nickel prices were around RMB 96,500/mt. As LME nickel prices dropped, Jinchuan nickel prices fell to RMB 97,100/mt, and Russian nickel prices sank to RMB 96,100/mt. Price fluctuations in Wuxi created arbitrage opportunities for traders, but transactions were quiet. Downstream buying interest was low due to falling prices and cash flow problem.