SHANGHAI, Jul. 15 (SMM) – 

 

SHFE 1311 copper contract started RMB 400/mt higher at RMB 50,700/mt on Friday. The most active SHFE copper contract pulled back immediately after jumping to RMB 50,730/mt since some investors took profits. In the afternoon, LME copper sank to USD 6,900/mt and China’s A-shares trimmed 1.7%, sending SHFE copper for November delivery down further to RMB 49,680/mt. Finally, SHFE 1311 copper contract closed at RMB 49,690/mt, down RMB 610/mt or 1.21%. Trading volumes and positions decreased 493,000 lots and 19,632 lots, respectively. The most active SHFE copper contract met strong resistance at the 30-day moving average, but will find support at the 5-day, 10-day and 20-day moving averages. 

 

Spot copper in Shanghai was quoted at a discount of RMB 0-100/mt and premium of RMB 0-20/mt over SHFE 1307 copper contract prices on Friday. Traded prices for standard-quality copper were between RMB 50,800-50,920/mt, and RMB 50,880-51,050/mt for high-quality copper. SHFE copper moved lower after a high opening. Cargo holders were anxious to sell at discount to raise cash. Middlemen lost interest as the price gap between SHFE 1307 and 1308 copper contract expanded. Downstream producers largely bought only to need. Discounts of spot copper expanded to RMB 0-150/mt in the afternoon, and only goods from Guiye and Jinchuan were quoted flat with futures prices. Traded prices fell to RMB 50,550-50,900/mt. SHFE copper inventories fell 4,645 lots in total last week to 168,376 lots.

 

SHFE 1310 aluminum contract opened flat at RMB14,390/mt last Friday. SHFE three-month aluminum contract sank below the 20-day moving average as longs closed positions, and finally finished at RMB 14,330/mt, down RMB 55/mt. Investors pulled out of the market ahead of the release of China’s 2Q GDP due early next week. Trading volumes fell 37,860 lots to 13,842 lots, and positions were also down 2,788 lots to 201,540 lots. The most active SHFE aluminum contract is expected continue to drop in the coming week, with weak support at RMB 14,300/mt. SHFE aluminum inventories decreased 13,147 mt to 382,750 mt.  

 

Mainstream traded prices for spot aluminum in Shanghai were RMB 14,400-14,420/mt, RMB 0-20/mt lower than SHFE 1307 aluminum contract prices. Low-iron aluminum was traded below RMB 14,570/mt. The most active SHFE aluminum contract inched down, triggering bearishness over spot aluminum. Supply was ample, but downstream demand was soft, bringing mainstream traded prices down to RMB 14,400/mt. A majority of traders expect aluminum prices to fall further in the coming week. In the afternoon, falling SHFE aluminum forced a few traders to cut offers to RMB 14,390/mt, but downstream producers and middlemen generally held to the sidelines.      

 

The most active SHFE lead contract price opened lower at RMB 13,905/mt with influence of Bernanke’s remark dissipating, and hovered between RMB 13,870-13,890/mt. Investors refused to enter the market, and some booked profits ahead of the weekend, with prices finally closing at RMB 13,875/mt, down RMB 75/mt. Trading volumes were down 74 lots to 84 lots, while positions increased 28 lots to 2,478 lots.

 

In China’s spot lead markets, supplies from lead smelters dropped noticeably, with spot prices down RMB 20/mt. Chihong Zn & Ge was quoted at RMB 13,760/mt, with discounts of RMB 120/mt against the most active SHFE 1309 lead contract price. Nanfang was offered at RMB 13,720/mt, while warrants for Shuikoushan were offered at RMB 13,760/mt, with premiums of RMB 40/mt over the SHFE 1307 lead contract price. Quotes for Shenqian were rarely heard lately due to maintenance at the producer, but quotes were reported at around RMB 13,700/mt on Friday. Offers for other brands were sparse, and downstream consumers still purchased as needed.

 

SHFE 1310 zinc contract opened higher at RMB 14,765/mt on Friday. The most active SHFE zinc contract moved within RMB 14,715-14,735/mt in the morning session, but then inched down to RMB 14,705/mt. China’s A-shares shed 1.62% and LME zinc fell, driving SHFE zinc for October delivery down to RMB 14,620/mt. SHFE three-month zinc contract ended the day at RMB 14,660/mt, down RMB 95/mt or 0.64%. Trading volumes plunged 57,462 lots to 45,982 lots, but positions increased 2,586 lots to 154,232 lots. 

 

Mainstream traded prices of #0 zinc were RMB 14,770-14,790/mt on Friday, RMB 70-80/mt higher than SHFE 1310 zinc contract prices and essentially flat with yesterday. #1 zinc was traded around RMB 14,720/mt. The most active SHFE zinc contract drifted lower after a high opening. Most smelters refrained from selling, while traders were more willing to sell now that zinc prices have risen. Downstream producers shied away from high prices.  

 

Last Friday, trading in Shanghai spot tin market turned quiet again, but goods offered at RMB 136,500/mt were rarely found. Mainstream traded prices were RMB 137,000-138,000/mt. Some goods from Jiangxi were quoted at RMB 137,000/mt and were rapidly consumed in the morning. Yunnan Tin Group held quotes firm at RMB 138,500/mt, but few transaction was done. 

 

In Shanghai, Jinchuan nickel prices were between RMB 96,200-97,400/mt, and Russian nickel prices were around RMB 96,200/mt. As the domestic/imported nickel price ratio improved, Russian nickel supply was ample, and some traders reported South African nickel was also massive. In the afternoon, Jinchuan nickel prices fell to RMB 96,900-97,000/mt due to weakening LME nickel prices, and Russian nickel prices dropped to RMB 95,800/mt, with transactions muted.