SMM Base Metals Market Daily Review (2013-10-15)

Price Review & Forecast 09:55:45AM Oct 16, 2013 Source:SMM

SHANGHAI, Oct. 16 (SMM)--

Copper:
Copper for January delivery on the Shanghai Futures Exchange (SHFE), opened RMB 420/mt higher at RMB 52,300/mt Tuesday, as LME copper extended gains overnight. The contract hit a high of RMB 52,390/mt after opening, but then wiped out earlier gains as longs took profits and as the Shanghai Composite Index fell back slightly. In the afternoon trading session, the red metal tested support at RMB 52,050/mt before closing the day at RMB 52,150/mt, up RMB 270/mt or 0.52%. Trading volumes and positions were off 124,000 lots and 1,334 lots, respectively. SHFE 1401 copper contract has found support at the 10-day moving average for the time being, but met resistance at RMB 52,500/mt as investors were cautious before delivery of SHFE 1310 copper contracts.
 
Spot copper in Shanghai was quoted at a contango of RMB 0-130/mt and a backwardation of RMB 0-50/mt over SHFE 1310 copper contract Tuesday morning. Traded prices were RMB 52,320-52,380/mt for standard-quality copper, and RMB 52,440-52,580/mt for high-quality copper. The price gap between SHFE 1310 and 1311 copper contracts narrowed to less than RMB 100/mt, prompting some to sell at lower prices. High-quality copper was quoted flat with SHFE current-month contracts, while standard-quality copper was offered at contango. Lower prices enticed some traders to go bargain hunting. However, offers rose in the second trading session, deterring downstream producers from buying. In the afternoon, price spread between SHFE 1310 and 1311 copper contracts continued to fall. Cargo holders were inclined to raise backwardation for spot copper, with high-quality copper quoted at a backwardation of RMB 100-120/mt over the SHFE 1310 copper contract price. However, the low buying interest against higher prices led quotes to drop to the range between a contango of RMB 0-20/mt and a backwardation of RMB 110/mt. Traded prices were RMB 52,300-52,500/mt. Transactions were limited, and some goods holders started to offer prices based on SHFE 1311 copper contract price. Spot copper is expected to be offered at a backwardation of RMB 100/mt against the SHFE copper for November delivery Wednesday after the contract became the current-month contract.
      
Aluminum:
October aluminum on the Shanghai Futures Exchange (SHFE), slid by RMB 185/mt after opening on Tuesday. This caused SHFE 1312 aluminum contracts, the most active one, to decline to an session low of RMB 14,330/mt after starting the day at RMB 14,445/mt. SHFE aluminum for December delivery ended down RMB 85/mt at RMB 14,350/mt, surrendering gains made during previous days. Trading volumes contracted 84 lots to 5,688 lots, and positions also shrank 286 lots to 66,286 lots.

Mainstream traded prices for spot aluminum in Shanghai dropped RMB 100/mt to RMB 14,490-14,510/mt on Tuesday, a premium of RMB 20-40/mt over SHFE 1310 aluminum contracts. Prices were RMB 14,450-14,460/mt in Wuxi, and RMB 14,480-14,490/mt in Hangzhou. Prices for most aluminum ingot slid below RMB 14,500/mt, except for selected brand. Some went bargain hunting, but purchases were seen limited.
 
Zinc:
SHFE 1401 zinc contract prices opened high at RMB 15,025/mt, but then hovering around RMB 14,960/mt as a large number of longs closed positions. LME zinc prices dropped sharply before the end of trading, dragging down SHFE zinc prices to hit a daily low of RMB 14,915/mt, and closed at RMB 14,945/mt, down RMB 10/mt or 0.07%. Trading volumes increased by 6,024 lots, to 49,856 lots, and total positions decreased by 3,602 lots, to 145,564 lots. Investor concerns eased due to productive negotiation on US debt ceiling issue, and SHFE zinc prices are expected to rally to RMB 15,000/mt Wednesday.

#0 zinc prices were between RMB 15,060-15,130/mt, with spot premiums of RMB 100-150/mt against SHFE 1401 zinc contract prices. #1 zinc prices were around RMB 15,020/mt, and Belgium #0 zinc availability was high, with spot premiums of RMB 30-40/mt against SHFE 1401 zinc contract prices. SHFE 1401 zinc contract prices opened high but fell later the day, closing flat at the previous day. Cargo holders were holding prices firm, with spot premiums firm. Smelters did not have high inventory pressure as they had moved goods before the holiday, and other cargo holders were holding prices firm. Traders were unwilling to purchase, with premiums high. Spot zinc prices climbed above RMB 15,000/mt recently, forcing downstream buyers out of the market, leaving trading muted. Yuguang and Shuangyan branded #0 zinc prices were between RMB 15,110-15,130/mt, and other zinc ingot was traded between RMB 15,060-15,090/mt.

Lead:
The most active SHFE lead contract prices started RMB 155/mt higher than the settlement price of Monday at RMB 14,300/mt, boosted by a USD 30/mt spike in LME lead overnight, but then followed the LME lead price trend down to touch a low of RMB 14,160/mt. The most-trade SHFE lead contract price found support at the 5 and 20-day moving averages at the tail of trading to finally end at RMB 14,215/mt, up RMB 70/mt. Trading volumes shrank by 290 lots to 586 lots, while positions inched up 6 lots to 9,020 lots.
 
However, spot lead prices in Shanghai show no significant rise. Jinsha and Chengyuan were quoted at RMB 14,130-14,150/mt, but traded prices for Jinsha were lower at RMB 14,110-14,120/mt given increasing supplies, with contango against the most active SHFE lead contract price expanding from RMB 60/mt to RMB 120/mt. Price was RMB 14,080/mt for Hanjiang and RMB 14,050/mt for Humon. Transactions improved with as deals between traders picked up, but purchases by downstream buyers remained limited.
 
Tin:
Mainstream traded prices in Shanghai tin market were between RMB 149,500-153,500/mt on Tuesday. Nanshan and Jinlong were mainly traded at RMB 149,500/mt, while resources of Yunnan Tin Group were offered higher at RMB 153,500/mt due to limited goods availability. Yunheng, Yinsheng, and Yunxiang were sold at RMB 150,000-151,500/mt. The consolidation of LME tin prices left strong wait-and-see mood in spot market, with transactions seldom reported.

Nickel:
In Shanghai, SMM #1 nickel prices were RMB 97,200-98,100/mt, with transactions among traders muted in the morning session. LME nickel prices rose initially before falling, with traders moving goods actively. Jinchuan nickel prices were around RMB 97900/mt, and Russian nickel prices were around RMB 96,900/mt.
 

SMM Base Metals Market Daily Review (2013-10-15)

Price Review & Forecast 09:55:45AM Oct 16, 2013 Source:SMM

SHANGHAI, Oct. 16 (SMM)--

Copper:
Copper for January delivery on the Shanghai Futures Exchange (SHFE), opened RMB 420/mt higher at RMB 52,300/mt Tuesday, as LME copper extended gains overnight. The contract hit a high of RMB 52,390/mt after opening, but then wiped out earlier gains as longs took profits and as the Shanghai Composite Index fell back slightly. In the afternoon trading session, the red metal tested support at RMB 52,050/mt before closing the day at RMB 52,150/mt, up RMB 270/mt or 0.52%. Trading volumes and positions were off 124,000 lots and 1,334 lots, respectively. SHFE 1401 copper contract has found support at the 10-day moving average for the time being, but met resistance at RMB 52,500/mt as investors were cautious before delivery of SHFE 1310 copper contracts.
 
Spot copper in Shanghai was quoted at a contango of RMB 0-130/mt and a backwardation of RMB 0-50/mt over SHFE 1310 copper contract Tuesday morning. Traded prices were RMB 52,320-52,380/mt for standard-quality copper, and RMB 52,440-52,580/mt for high-quality copper. The price gap between SHFE 1310 and 1311 copper contracts narrowed to less than RMB 100/mt, prompting some to sell at lower prices. High-quality copper was quoted flat with SHFE current-month contracts, while standard-quality copper was offered at contango. Lower prices enticed some traders to go bargain hunting. However, offers rose in the second trading session, deterring downstream producers from buying. In the afternoon, price spread between SHFE 1310 and 1311 copper contracts continued to fall. Cargo holders were inclined to raise backwardation for spot copper, with high-quality copper quoted at a backwardation of RMB 100-120/mt over the SHFE 1310 copper contract price. However, the low buying interest against higher prices led quotes to drop to the range between a contango of RMB 0-20/mt and a backwardation of RMB 110/mt. Traded prices were RMB 52,300-52,500/mt. Transactions were limited, and some goods holders started to offer prices based on SHFE 1311 copper contract price. Spot copper is expected to be offered at a backwardation of RMB 100/mt against the SHFE copper for November delivery Wednesday after the contract became the current-month contract.
      
Aluminum:
October aluminum on the Shanghai Futures Exchange (SHFE), slid by RMB 185/mt after opening on Tuesday. This caused SHFE 1312 aluminum contracts, the most active one, to decline to an session low of RMB 14,330/mt after starting the day at RMB 14,445/mt. SHFE aluminum for December delivery ended down RMB 85/mt at RMB 14,350/mt, surrendering gains made during previous days. Trading volumes contracted 84 lots to 5,688 lots, and positions also shrank 286 lots to 66,286 lots.

Mainstream traded prices for spot aluminum in Shanghai dropped RMB 100/mt to RMB 14,490-14,510/mt on Tuesday, a premium of RMB 20-40/mt over SHFE 1310 aluminum contracts. Prices were RMB 14,450-14,460/mt in Wuxi, and RMB 14,480-14,490/mt in Hangzhou. Prices for most aluminum ingot slid below RMB 14,500/mt, except for selected brand. Some went bargain hunting, but purchases were seen limited.
 
Zinc:
SHFE 1401 zinc contract prices opened high at RMB 15,025/mt, but then hovering around RMB 14,960/mt as a large number of longs closed positions. LME zinc prices dropped sharply before the end of trading, dragging down SHFE zinc prices to hit a daily low of RMB 14,915/mt, and closed at RMB 14,945/mt, down RMB 10/mt or 0.07%. Trading volumes increased by 6,024 lots, to 49,856 lots, and total positions decreased by 3,602 lots, to 145,564 lots. Investor concerns eased due to productive negotiation on US debt ceiling issue, and SHFE zinc prices are expected to rally to RMB 15,000/mt Wednesday.

#0 zinc prices were between RMB 15,060-15,130/mt, with spot premiums of RMB 100-150/mt against SHFE 1401 zinc contract prices. #1 zinc prices were around RMB 15,020/mt, and Belgium #0 zinc availability was high, with spot premiums of RMB 30-40/mt against SHFE 1401 zinc contract prices. SHFE 1401 zinc contract prices opened high but fell later the day, closing flat at the previous day. Cargo holders were holding prices firm, with spot premiums firm. Smelters did not have high inventory pressure as they had moved goods before the holiday, and other cargo holders were holding prices firm. Traders were unwilling to purchase, with premiums high. Spot zinc prices climbed above RMB 15,000/mt recently, forcing downstream buyers out of the market, leaving trading muted. Yuguang and Shuangyan branded #0 zinc prices were between RMB 15,110-15,130/mt, and other zinc ingot was traded between RMB 15,060-15,090/mt.

Lead:
The most active SHFE lead contract prices started RMB 155/mt higher than the settlement price of Monday at RMB 14,300/mt, boosted by a USD 30/mt spike in LME lead overnight, but then followed the LME lead price trend down to touch a low of RMB 14,160/mt. The most-trade SHFE lead contract price found support at the 5 and 20-day moving averages at the tail of trading to finally end at RMB 14,215/mt, up RMB 70/mt. Trading volumes shrank by 290 lots to 586 lots, while positions inched up 6 lots to 9,020 lots.
 
However, spot lead prices in Shanghai show no significant rise. Jinsha and Chengyuan were quoted at RMB 14,130-14,150/mt, but traded prices for Jinsha were lower at RMB 14,110-14,120/mt given increasing supplies, with contango against the most active SHFE lead contract price expanding from RMB 60/mt to RMB 120/mt. Price was RMB 14,080/mt for Hanjiang and RMB 14,050/mt for Humon. Transactions improved with as deals between traders picked up, but purchases by downstream buyers remained limited.
 
Tin:
Mainstream traded prices in Shanghai tin market were between RMB 149,500-153,500/mt on Tuesday. Nanshan and Jinlong were mainly traded at RMB 149,500/mt, while resources of Yunnan Tin Group were offered higher at RMB 153,500/mt due to limited goods availability. Yunheng, Yinsheng, and Yunxiang were sold at RMB 150,000-151,500/mt. The consolidation of LME tin prices left strong wait-and-see mood in spot market, with transactions seldom reported.

Nickel:
In Shanghai, SMM #1 nickel prices were RMB 97,200-98,100/mt, with transactions among traders muted in the morning session. LME nickel prices rose initially before falling, with traders moving goods actively. Jinchuan nickel prices were around RMB 97900/mt, and Russian nickel prices were around RMB 96,900/mt.