SMM Base Metals Market Daily Review (2013-7-25)

SHANGHAI, Jul. 26 (SMM)--

Copper:
SHFE 1311 copper contract opened RMB 80/mt lower at RMB 50,320/mt on Thursday as LME copper pulled back after hitting high overnight. However, the most active contract rose after its opening as longs entered the market and as LME copper regained support at USD 7,000/mt due to falling US dollar index. SHFE copper for November delivery hit an intraday high of USD 50,560/mt at the tail of the session before closing at RMB 50,490/mt, up RMB 90/mt or 0.18%. Trading volumes decreased by 161,000 lots, but positions increased by 12,278 lots. Technical resistance remains strong, though.  
 
Spot copper in Shanghai was quoted at a premium of RMB 100-350/mt over SHFE 1308 copper contract prices on Thursday. Traded prices for standard-quality copper were between RMB 50,900-51,050/mt, and RMB 51,100-51,300/mt for high-quality copper. Cargo holders became more willing to sell against tightening liquidity on the last day of the delivery of copper signed on a long-term basis, sending premium down. Prices of imported standard-quality copper, in particular, fell most sharply. Middlemen and downstream producers stayed out of the market. In the afternoon, more cargo holders sold goods actively, and the large amount of copper imports arriving at ports caused finance-driven traders to enter the market and sell goods. Premiums for spot copper thus fell to RMB 60-280/mt, and traded prices were RMB 50,900-51,250/mt.
 
Aluminum:
SHFE 1310 aluminum contract opened flat at RMB 14,375/mt on Thursday. The most active contract only inched up in the afternoon session, and closed RMB 25/mt or 0.17% higher at RMB 14,400/mt. Positions increased by 220 lots to 64,920 lots, and trading volumes were up 2,234 lots to 4,804 lots. Judging from technical indicator, SHFE three-month aluminum contract will continue to meet resistance at RMB 14,400/mt.

Mainstream traded prices for spot aluminum in Shanghai were RMB 14,340-14,360/mt on Thursday, RMB 10-30/mt lower than SHFE 1308 aluminum contract prices. Low-iron aluminum was traded around RMB 14,520/mt. SHFE 1308 aluminum contract was stagnant. Cargo holders were anxious to sell as the end-of-month liquidity crunch bit in, but demand was lackluster, pulling spot aluminum prices in Shanghai and Wuxi down to RMB 14,340/mt. Prices in Hangzhou were more resilient due to tight supply. In the afternoon, the most active SHFE aluminum contract edged up, allowing traders to hike offers from RMB 14,360/mt to RMB 14,380/mt, but transactions were muted.   
  
Lead:
SHFE 1309 lead contract price opened at RMB 13,865/mt on June 25 and dipped to RMB 13,840/mt near the midday due to pressure from shorts, but soon stabilized at the opening level. SHFE lead finally ended the day at RMB 13,865/mt, up RMB 20/mt from a day earlier. Trading volumes inched down 6 lots to 122 lots, while positions fell 20 lots to 2,548 lots. SHFE lead prices are expected to move up between the 10 and 20-day moving averages.
 
Spot lead prices in China were resilient on Thursday due to tight supplies. Quotes for Chihong Zn & Ge were reported at RMB 13,800/mt, with discount against SHFE 1309 lead contract price narrowing to RMB 60/mt. Hanjiang and Mengzi were quoted at RMB 13,750-13,760/mt. Goods of Humon were offered at RMB 13,700/mt, while Jinli was quoted at RMB 13,670/mt. Downstream buyers remained wary against the limited supply, but overall trading improved slightly.
 
Zinc:
SHFE 1310 zinc contract prices opened slight higher at RMB 14,645/mt, and then hovered around the 10-day moving average. LME zinc prices edged up due to plummeting US dollar index, which pushed up SHFE zinc prices to strengthen in the afternoon. As a large number of longs entered the market,  SHFE zinc prices pulled up to RMB 14,690/mt, once touching RMB 14,710/mt, and finally closing at RMB 14,690/mt, up RMB 65/mt, or 0.44%. Trading volumes of SHFE 1310 zinc contract increased by 3,114 lots, to 20,844 lots, and total positions decreased by 2,802 lots, to 119,532 lots. Total trading volumes of SHFE 1311 zinc contract increased by 10,292 lots, to 394,546 lots, and total positions increased by 6,616 lots, to 103,376 lots.

#0 zinc prices were between RMB 14,710-14,750/mt, with spot premiums of RMB 90-110/mt against SHFE 1310 zinc contract prices. #1 zinc prices were around RMB 14,700/mt. As SHFE zinc prices edged up, traders continued to sell goods, with some traders remaining cautious, and downstream purchasing increased ahead of the weekend, but transactions were still quiet. SHFE zinc prices edged up in the afternoon, and #0 zinc prices were between RMB 14,780-14,790/mt, with spot premiums of RMB 90-100/mt against SHFE 1310 zinc contract prices.
 
Tin:
In Shanghai tin market, mainstream traded prices were RMB 135,500-137,500/mt on July 25. A few transactions for Nanshan and Jinlong were made at RMB 135,500/mt, and some resources of Yunnan Tin Group with low lead content were quoted at RMB 138,000/mt. The firm quotes from Yunnan Tin Group are the result of limited supply. Supplies were reported from SME smelters, including Nanshan, Jinlong, Yunxiang, and Weitai, so low-prices resources increased compared with last week. That, combined with weak consumption, left prices less resilient.

Nickel:
In Shanghai, transactions did not improve and were mainly made among traders. #1 nickel prices were between RMB 98,800-99,900/mt in the morning. Jinchuan did not adjust ex-works nickel prices as LME nickel prices overnight closed up USD 200/mt. But as LME nickel prices soared in the afternoon, and as traders see prices rising to USD 14,500/mt, Jinchuan nickel prices surged to RMB 100,000/mt, touching as high as RMB 100,200/mt.