SHANGHAI, Jul. 24 (SMM) – SHFE 1311 copper contract opened RMB 170/mt higher at RMB 50,350/mt on Tuesday as LME copper extended gains overnight. The most active contract found its high at RMB 50,690/mt due to a wave of buying and a 2% rally in China’s A-shares. In the afternoon, SHFE copper for November delivery was pushed down by short selling to RMB 50,220/mt before closing at RMB 50,260/mt, up RMB 80/mt or 0.16%. Trading volumes shrank by 6,288 lots, but positions increased by 2,374 lots. SHFE copper for delivery in four months will continue to meet strong resistance at RMB 50,500/mt.
Spot copper in Shanghai was offered at a premium of RMB 160-400/mt over SHFE 1308 copper contract prices on Tuesday. Traded prices for standard-quality copper were between RMB 51,150-51,250/mt, and RMB 51,320-51,480/mt for high-quality copper. SHFE 1311 copper contract drifted higher after a high opening. The price gap between standard-quality copper and high-quality copper widened further. Middlemen became reluctant to buy once prices rose above RMB 51,000/mt. Premium of RMB 400-420/mt was reported only for Guixi copper. Holders of standard-quality copper cut premium to RMB 160/mt from RMB 200/mt. Higher prices deterred downstream producers from buying. Market players are worried that copper prices may fall back following several consecutive days of gains given the anemic downstream demand. In the afternoon, selling interest among cargo holders increased, and premiums for spot copper remained little changed at RMB 170-370/mt, but transactions were limited, with traded prices were between RMB 51,050-51,300/mt. Although the high premiums for spot copper were viewed as a major support behind a rebound in copper prices, the weak consumption and risks arising from continuous price hikes left many market players on the sidelines.