SMM Base Metals Market Daily Review (2013-9-30)

SHANGHAI, Oct. 8 (SMM) –

The most active copper contract on the Shanghai Futures Exchange (SHFE) opened RMB 30/mt higher at RMB 52,360/mt on September 30. HSBC’s final China manufacturing PMI for September was revised down and fell short of flash reading, but did point to a third straight month of growth, pushing Chinese stock market up slightly. SHFE copper for December delivery followed rising Chinese stock market up, but upside space was limited as investors took profits ahead of the weeklong holiday. In the afternoon session, LME copper challenged resistance at USD 7,300/mt, pushing SHFE 1312 copper contract up to RMB 52,860/mt, which ended the day at RMB 52,800/mt, up RMB 470/mt or 0.9%. Trading volumes and positions of SHFE 1312 copper contracts plunged by 47,620 lots and 17,226 lots, respectively. Total trading volumes and positions also dropped 44,050 lots and 37,330 lots, respectively.

 

Spot copper in Shanghai was offered at a contango of RMB 0-120/mt and a backwardation of RMB 0-50/mt over SHFE 1310 copper contract. Traded prices were RMB 52,550-52,630/mt for standard-quality copper, and RMB 52,650-52,800/mt for high-quality copper. Most market players pulled out of the market on the last trading day before the weeklong holiday, leaving market quiet. Holders of high-quality copper hiked firm due to tight supply. Only a small number of downstream producers built up stocks. In the afternoon, trading was muted.   

 

The most active aluminum contract on the Shanghai Futures Exchange (SHFE), SHFE 1312 aluminum contract, hovered near its opening price after starting the day higher at RMB 14,290/mt on September 30. The contract dipped to RMB 14,270/mt, but climbed above the 3-day and 60-day moving averages to a high of RMB 14,320/mt at the tail of the session. Finally, the light metal closed at RMB 14,315/mt. Investors pulled out of the market since Monday was the last trading day before the 7-day holiday in China. Trading volumes increased 240 lots to 7,200 lots, but positions dropped 3,290 lots to 73,842 lots.

 

Mainstream traded prices for spot aluminum in Shanghai were RMB 14,620-14,640/mt, RMB 14,640-14,670/mt in Wuxi, and RMB 14,640-14,660/mt in Hangzhou. Only a few cargo holders entered the market, so did buyers on the last trading day before the Chinese National Day holiday, leaving markets quiet.  

The most active lead contract on the Shanghai Futures Exchange (SHFE), SHFE 1312 lead contract, started RMB 20/mt higher at RMB 14,125/mt on September 30. The contract consolidated at the 5-day and 10-day moving averages due to support from other base metals and rising Shanghai Composite Index, but lacked any further upward momentum since investors were cautious on the last trading day ahead of the weeklong holiday in China. SHFE lead for December delivery found its high at RMB 14,150/mt before ending the day at RMB 14,120/mt, up RMB 15/mt or 0.11%. Trading volumes contracted 248 lots to 438 lots, while positions added 14 lots to 8,314 lots. 

 

Spot markets turned quiet since most downstream producers had completed restocking. Chihong and Nanfang lead was traded at RMB 14,100-14,110/mt, a contango of RMB 20/mt over SHFE 1312 lead contract. Lead of other brands was rarely traded.

 

SHFE 1312 zinc contracts prices opened slightly higher at RMB 14,785/mt September 30. Due to the launch of Shanghai Free Trade Zone, the Shanghai Composite Index opened high and moved higher, supporting SHFE 1312 zinc contracts prices to inch up to RMB 14,820/mt. Drove up by LME zinc prices, SHFE zinc prices soared to RMB 14,860/mt, and closed at RMB 14,850/mt, up RMB 95/mt or 0.64%. 

 

Trading volumes decreased by 318 lots, to 24,756 lots, and total positions decreased by 8,672 lots, to 113,206 lots.

 

#0 zinc prices were between RMB 14,920-14,950/mt, with spot premiums of RMB 100-130/mt against SHFE 1312 zinc contract prices. #1 zinc prices were between RMB 14,880-14,890/mt. Imported #0 zinc prices were RMB 14,920/mt. SHFE 1312 zinc contract prices opened high and then moved to RMB 14,820/mt, with quotes by cargo holders firm but purchasing modest. Both traders and smelters stood on the sidelines ahead of the Chinese holiday, leaving transactions muted.

On the last trading day before the Chinese National Day holiday, spot tin prices in Shanghai were mainly between RMB 148,500-151,000/mt, with few deals made. Most smelters held quotations firm given bullish attitude to post-holiday market.

 

In Shanghai, Jinchuan raised nickel prices by RMB 1,000/mt to RMB 98,500/mt. Transactions were quiet on the last trading day before the holiday. #1 nickel prices were between RMB 97,000-98,000/mt, with traded prices between SMM quotes range. Traders left the market in the afternoon.