SHFE 1311 copper contract opened RMB 510/mt lower at RMB 49,750/mt on Thursday due to falling LME copper prices overnight. The most active contract fell to near the daily moving average due to selloff and a 1% drop in China’s A-shares, with the high-end price at RMB 49,780/mt. In the afternoon, SHFE copper for November delivery dipped below the daily moving average, with the low-end price at RMB 49,370/mt. SHFE copper for delivery in four months did advance to its opening price at the tail of the session as shots closed positions, and finally closed at RMB 49,690/mt, down RMB 570/mt or 1.13%. Trading volumes shrank by 408,000 lots, but positions increased by 3,846 lots. SHFE copper prices remain under downward pressure.

 

Spot copper in Shanghai was offered at a premium of RMB 100-280/mt over SHFE 1308 copper contract prices on Thursday. Traded prices for standard-quality copper were between RMB 50,100-50,250/mt, and RMB 50,230-50,430/mt for high-quality copper. Spot copper premium rose significantly. Middlemen were hunting for low-priced high-quality copper. Prices of standard-quality copper were almost RMB 200/mt lower than those of high-quality copper due to ample supply. Downstream producers purchased in modest amounts now that copper prices have fallen and weekend is drawing near. Premiums for spot copper remained little changed in the afternoon, but traded prices were slightly lower at RMB 50,050-50,300/mt. Market started to experience an oversupply. 

 

SHFE 1310 aluminum contract opened lower at RMB 14,305/mt on Thursday. The most active contract climbed to an intraday high of RMB 14,350/mt, but retreated in the afternoon session as longs closed positions. Finally, SHFE aluminum for October delivery closed at RMB 14,295/mt, down RMB 35/mt or 0.24%. Trading volumes increased 330 lots to 4,118 lots, but positions fell 890 lots to 66,566 lots. SHFE aluminum inventories were down 944 mt to 79,005 mt. SHFE three-month aluminum contract should hover around RMB 14,300/mt for the near term. 

 

Mainstream traded prices for spot aluminum in Shanghai were RMB 14,340-14,350/mt on Thursday, RMB 0-10/mt lower than SHFE 1308 aluminum contract prices. Low-iron aluminum prices were almost the same as aluminum prices. SHFE 1308 aluminum contract rose to near RMB 14,350/mt towards mid-day after a low opening, allowing traders to hold offers at RMB 14,340/mt. However, downstream producers exhibited low buying interest. In the afternoon, only a few transactions were concluded, with traded prices down to near RMB 14,330/mt.    

 

SHFE 1309 lead contract price started RMB 30/mt lower at RMB 13,855/mt and stayed in narrow range in the morning trading hours. In the afternoon, Chinese stocks weakened, and some investors liquidated positions, leaving prices down RMB 20/mt to RMB 13,835/mt. The most active SHFE lead contract price finally ended at RMB 13,845/mt, down RMB 35/mt from a day earlier. Trading volumes fell 184 lots to 226 lots, while positions were down 38 lots to 2,488 lots. 

 

In China’s spot lead market, Chihong Zn & Ge cut supplies due to regular maintenance in summer months, and quotes for the brand were rarely heard in Shanghai. Prices of other brands dropped RMB 10-20/mt, with Tongguan offered at RMB 13,740/mt, with discount of RMB 120/mt against the SHFE 1309 lead contract price. Mengzi was quoted at RMB 13,710/mt, while Hanjiang was offered at RMB 13,700/mt. Downstream buyers only purchased as needed as domestic lead prices did not fall along with LME lead prices. Most buyers only made inquiries in the afternoon as SHFE lead prices fell. 

SHFE 1310 zinc contract prices opened lower at RMB 14,555/mt, dragged down by LME zinc prices overnight, falling below RMB 14,600/mt. SHFE zinc prices struggled around RMB 14,540/mt in the morning session, as LME zinc prices inched down to USD 1,860/mt at noon, SHFE zinc prices fell to test the 20-day moving average in the afternoon, dipping to RMB 14,510/mt and finally closing at RMB 14,520/mt, down RMB 145/mt or 0.99%. Trading volumes decreased by 3,066 lots, to 36,368 lots, and total positions decreased by 3,708 lots, to 140,850 lots.

 

#0 zinc prices were between RMB 14,640-14,660/mt, with spot premiums of RMB 90-110/mt against SHFE 1310 zinc contract prices. #1 zinc prices were between RMB 14,600-14,610/mt. SHFE zinc prices opened low and fluctuated in a narrow range. As spot zinc prices plunged by around RMB 100/mt, smelters were distressed; some arbitrage traders released goods modestly due to expanding premiums, and traders lacked buying interest. Downstream buyers purchased modestly at lower prices, leaving transactions muted. SHFE zinc prices sank in the afternoon, and #0 zinc prices were between RMB 14,630-14,650/mt, with spot premiums of RMB 110-120/mt against SHFE 1310 zinc contract prices.

Spot tin prices in Shanghai were between RMB 137,000-138,000/mt on Thursday, with some brands traded at RMB 136,800/mt. A few goods with low lead content from Yunnan Tin Group were offered at RMB 138,500/mt. Trading remained modest as smelters were not willing to move goods at low prices, while traders also were reluctant to purchase. Downstream buyers rarely bought goods due to poor order books in low demand season. Prices are still waiting for guides from LME tin prices. 

In Shanghai, transactions of Jinchuan nickel were more brisk than Russian nickel, and were more active in the morning. LME nickel prices overnight closed the day up USD 196/mt, but China’s domestic spot prices only rose by RMB 400/mt, with the domestic/overseas nickel price ratio unfavorable for imports, keeping transactions of Russian nickel quiet. Jinchuan nickel raised nickel prices further by RMB 1,000/mt, to RMB 98,500/mt, and will likely update prices every day. But Jinchuan’s quotes barely affected the market, with prices between RMB 97,700-97,900/mt. #1 nickel prices were between RMB 96,700-97,800/mt in the morning, although LME nickel prices inched down in the afternoon, spot prices held firm, with Jinchuan nickel prices between RMB 97,700-97,800/mt, and Russian nickel prices between RMB 96,700-96,800/mt.