SMM Brief on SHFE Copper Prices (2013-10-8)

SHANGHAI, Oct. 8 (SMM) – The most active copper contract on the Shanghai Futures Exchange (SHFE) opened RMB 10/mt lower at RMB 52,560/mt on Tuesday, dragged down by falling LME copper prices. The contract traded at a low of RMB 52,300/mt before bouncing back to near the daily moving average, drawing support from the Shanghai Composite Index, which rallied by 1%. Increased buying of SHFE back-month copper contracts pushed SHFE copper for December delivery further up to a day’s high of RMB 52,650/mt. The red metal, however, still ended RMB 50/mt or 0.1% lower at RMB 52,520/mt. Trading volumes and positions of SHFE 1312 copper contracts plummeted by 47,630 lots and 7,612 lots, respectively. Trading volumes and positions of SHFE 1401 copper contracts, on the contrary, added 12,825 lots and 12,036 lots, respectively. As such, SHFE copper for delivery in January next year will likely become the new most active contract tomorrow. Investors should be wary that possible selloff in SHFE back-month copper contracts will keep a lid on the most active SHFE copper contract.