SHANGHAI, Sept. 13 (SMM) – The most traded copper contract on the Shanghai Futures Exchange (SHFE) opened RMB 160/mt lower at RMB 51,880/mt on Thursday, weighed down by falling LME copper prices overnight. The most active contract encountered strong resistance at the 5-day and 30-day moving averages after opening and dropped to RMB 51,700/mt as short sellers increased positions. The Shanghai Composite Index climbed by almost 1% in the afternoon session, but this failed to offer upward momentum to the red metal. December copper on the SHFE slid further to RMB 51,380/mt at the tail of the session, closing at RMB 53,410/mt, down RMB 630/mt or 1.21%. Trading volumes and positions were up 31,224 lots and 8,854 lots, respectively.
Spot copper in Shanghai was offered at a backwardation of RMB 20-160/mt over SHFE 1309 copper contract on Thursday. Traded prices were RMB 52,100-52,150/mt for standard-quality copper, and RMB 52,180-52,280/mt for high-quality copper. SHFE 1312 copper contract trended down after a low opening. Cargo holders remained anxious to sell, causing backwardation to narrow further. Some traders preferred to buy standard-quality copper, narrowing the price spread between standard-quality copper and high-quality copper. Prices of hydro-copper were almost flat with those of standard-quality copper due to supply shortfall. Downstream producers purchased as needed at low prices. In the afternoon, price gap between high-quality and standard-quality copper continued to narrow with cargo holders lowering quotes. Backwardation for spot copper was between RMB 50-130/mt, with traded prices at RMB 52,100-52,220/mt.