SHANGHAI, Oct. 10 (SMM) –
The most active copper contract on the Shanghai Futures Exchange (SHFE), SHFE 1312 copper contract opened RMB 40/mt lower at RMB 52,400/mt on Wednesday, pulled down by falling LME copper overnight. The contract traded in a narrow range after starting the day, with the high-end price at RMB 52,440/mt. SHFE 1401 copper contract became the new most active contract near mid-day as LME copper’s retreat from USD 7,200/mt triggered massive selloff in SHFE back-month copper contracts. SHFE copper for January delivery followed LME copper down to RMB 51,750/mt before rebounding to near RMB 51,850/mt. SHFE 1312 copper contract closed down RMB 600/mt or 1.14% at RMB 51,840/mt. SHFE 1401 copper contract ended RMB 680/mt or 1.3% lower at RMB 51,680/mt, with day’s high and low at RMB 52,350/mt and 51,580/mt, respectively. Total trading volumes and positions burgeoned by 305,000 lots and 53,408 lots, respectively. January copper on the SHFE is expected to test support at RMB 51,500/mt.
Spot copper in Shanghai was offered at a contango of RMB 0-50/mt and a backwardation of RMB 0-100/mt over SHFE 1310 copper contract in the morning session. Traded prices were RMB 52,120-52,450/mt for standard-quality copper, and RMB 52,250-52,620/mt for high-quality copper. Weak demand forced some to cut offers. Standard-quality copper, in particular, was quoted at a contango over SHFE current-month copper contract. SHFE copper fell dramatically near midday, leaving suppliers split over offers. Some held quotations unchanged at the beginning, but most goods holders cut quotes. Low-end standard-quality copper was offered RMB 100/mt below SHFE 1310 copper contract. Traders bought spot copper and sold SHFE copper, while downstream producers stayed out of the market. In the afternoon, spot copper was mainly quoted between contango of RMB 0-50/mt and backwardation of RMB 0-80/mt, with traded prices falling slightly to RMB 52,100-52,250/mt. Market saw fewer supplies for high-grade copper, and most resources tradable in the market are hydro copper and standard-grade copper. Transactions were rarely made.
The most active aluminum contract on the Shanghai Futures Exchange (SHFE), SHFE 1312 aluminum contract, opened at RMB 14,370/mt on Wednesday. The contract crept higher to RMB 14,400/mt in the morning session, but followed SHFE 1310 aluminum contract down to RMB 14,340/mt during afternoon trading, with the closing price at RMB 14,345/mt. Trading volumes dropped 230 lots to 7,304 lots, and positions also fell 1,614 lots to 69,870 lots.
Cargo holders were eager to sell, but downstream producers were little interested in buying. Traders held to a wait-and-see stance in the belief that prices will fall. This caused backwardation over SHFE 1310 aluminum contract to fall to RMB 20-30/mt. Mainstream traded prices in Shanghai were RMB 14,600-14,610/mt, RMB 14,600-14,640/mt in Wuxi, and RMB 14,600-14,610/mt in Hangzhou. In the afternoon, mainstream traded prices edged down RMB 10/mt, with transactions muted.
The most active SHFE lead price started at RMB 14,095/mt on October 9 and touched an intraday high of RMB 14,155/mt. Later, the prices moved around RMB 14,100/mt and finally closed RMB 40/mt higher at RMB 14,095/mt, staying around the 5-day moving average. No major stories were reported. Traded volumes for the most active SHFE lead contract dropped by 72 lots to 420 lots, while positions were up 24 lots to 8,404 lots. Trading volumes ran counter to positions, an indication of pervasive caution among investors. Longs had a slight edge in the market at the moment.
In Shanghai spot lead market, resources of Jinsha were quoted at RMB 14,080/mt on October 9, with a contango of RMB 20/mt against the most active SHFE lead contract price. Chengyuan was traded at RMB 14,040-14,050/mt, a backwardation of RMB 60/mt over the SHFE 1310 lead contract price. Hanjiang was sold at RMB 14,010/mt, while Humon’s goods were traded at RMB 13,980/mt. Price for YY lead was RMB 13,950/mt. Downstream buyers showed little appetite for purchasing lead, with most transactions in spot market done at low prices. Holders of branded lead refused to sell at low prices, with trading light.
SHFE 1401 zinc contracts became the most actively traded contracts, with prices opening at RMB 14,780/mt, jumping above the 20-day moving average. Due to increasing positions, SHFE zinc prices soared to RMB 14,820/mt, hovering between RMB 14,775-14,795/mt in the afternoon, and closing at RMB 14,785/mt, up RMB 20/mt. Trading volumes increased by 3,084 lots, to 31,216 lots, and total positions increased by 9,252 lots, to 115,000 lots.
#0 zinc prices were between RMB 14,930-14,960/mt, with spot premiums of RMB 140-160/mt against SHFE 1401 zinc contract prices. #1 zinc prices were between RMB 14,890-14,910/mt, with transactions muted. Large amounts of Belgium #0 zinc were available in the market, with prices between RMB 14,880-14,890/mt. market players took a wait-and-see attitude, with inquiries from both traders and downstream buyers increasing, but overall transactions muted.
Spot tin prices in Shanghai were mainly between RMB 151,500-154,000/mt on Wednesday, flat with Tuesday, but trading was thin. Some goods of Jinlong and Nanshan were traded lower at RMB 151,000/mt. Market saw fewer inquiries in the afternoon. Smelters tended to lower quotation, but some still held quotes firm and watched on the sidelines. Tin prices were resistant to declines, but anemic consumption may pose downside risk on prices.
In Shanghai, transactions were quiet. Traders took a wait-and-see attitude in the morning and held prices firm. SMM #1 nickel prices were between RMB 96,800-97,900/mt, with transactions muted. As LME nickel prices lacked ability to rise, traders lowered prices, with Jinchuan nickel prices between RMB 97,700-97,800/mt was brisk, and Russian nickel prices between RMB 96,600-96,700/mt.