SHANGHAI, Oct. 28 (SMM) –
SHFE 1401 copper contract prices started RMB 70/mt higher at RMB 51,750/mt on Friday, as LME copper rallied overnight. The red metal then only moved between RMB 51,600-51,800/mt due to thin trading activities. In the afternoon session, plunging LME copper and a 1.9% decline in China’s A-shares sparked massive selloff, sending SHFE 1401 copper contract all the way down to RMB 51,100/mt. Finally, SHFE copper for January delivery ended down RMB 530/mt or 1.03% at RMB 51,150/mt. Trading volumes were off 24,964 lots, but positions were up 32,398 lots. Market believed support for SHFE copper will be lower at RMB 50,800/mt after the prices fell below RMB 51,500/mt. Further declines are on the way for the red metal.
Spot copper in Shanghai was quoted at a contango of RMB 0-100/mt and a backwardation of RMB 0-10/mt over SHFE 1311 copper contract on Friday. Traded prices were RMB 51,780-51,840/mt for standard-quality copper, and RMB 51,820-51,920/mt for high-quality copper. Contango narrowed, especially for standard-quality copper. Backwardation was reported only for Guixi copper. Traders and downstream producers purchased modest amounts of goods at the bottom. In the afternoon, falling SHFE copper prompted arbitragers to sell aggressively, with spot copper offered between a contago of RMB 100 and a backwardation of RMB 20/mt. Some traders bought in spot markets and sold futures, and a few downstream buyers also purchased at lows, with spot trading improving. Traded prices were between RMB 51,500-51,700/mt. SHFE copper stocks edged up 37 lots to 172,146 lots last week.
December aluminum on the Shanghai Futures Exchange (SHFE), the most active one, started at RMB 14,400/mt last Friday. The light metal was stagnant in the morning session, but slipped later in the day. Its decline triggered massive selloff, sending prices down further to RMB 14,368/mt. Finally, SHFE aluminum for January delivery closed RMB 5/mt lower at RMB 14,360/mt. Trading volumes added 3,164 lots to 7,328 lots, while positions shrank 1,590 lots to 57,468 lots.
Spot aluminum prices in Shanghai were RMB 14,490-14,500/mt, RMB 14,480-14,500/mt in Wuxi, and RMB 14,480-14,490/mt in Hangzhou. Cargo holders were eager to sell, while downstream producers restocked in small amounts for the upcoming weekend. Few traders entered the market. In the afternoon, spot aluminum prices remained little changed, with thin trading reported.
The most active SHFE lead prices opened at RMB 14,390/mt on Friday and basically fluctuated at RMB 14,410/mt after hitting an intraday high of RMB 14,425/mt in morning trading session. SHFE lead for December delivery then followed LME lead down to a low of RMB 14,280/mt and finally ended RMB 70/mt lower at RMB 14,320/mt. Technical indicators pointed to strong resistance. Trading volumes grew by 16 lots to 696 lots, while positions expanded by 196 lots to 10,680 lots.
Spot lead prices in Shanghai held steady on Friday. Goods of Jinsha and Nanfang were traded at RMB 14,280/mt, a discount of RMB 130/mt over the most active SHFE lead contract price. Traded price for Hanjiang branded lead was RMB 14,250/mt, while price for Humon’s goods was RMB 14,160/mt. Cargo holders moved goods aggressively, but downstream producers still refrained from buying, leaving transactions thin.
SHFE 1401 zinc contract prices opened flat at RMB 15,015/mt, and then touched RMB 15,095/mt, as LME zinc prices rose. But due to the lack of upward momentum, SHFE zinc prices dropped and moved between RMB 15,040-15,070/mt. In the afternoon, LME zinc prices jumped, while the Shanghai Composite Index inched down, when combined with selling pressure, SHFE zinc prices dipped to RMB 14,950/mt. Trading volumes increased by 17,158 lots, to 57,282 lots, and total positions decreased by 2,498 lots, to 129,000 lots.
#0 zinc prices were between RMB 15,090-15,150/mt, with spot premiums between RMB 50-90/mt against SHFE 1401 zinc contract prices. #1 zinc prices were around RMB 15,050/mt, but transactions were muted. Imported SMC and KZ #0 zinc prices were between RMB 15,110-15,120/mt, and trading were muted at the high end of the price range. SHFE 1401 zinc contract prices soared before falling back to the opening price, hovering around the 5 and 10-day moving average. Smelters and traders were actively moving goods to generate cash, while downstream buyers lacked buying interest, leaving trading muted.
Shanghai spot tin market remained stable last Friday, with traded prices at RMB 146,700-150,500/mt. Supply of low-priced resources dwindled, but the consolidation of LME tin prices helped reassure market. Downstream buyers continued to purchase as needed, leaving transactions modest.
In Shanghai, Jinchuan raised nickel prices by RMB 500/mt, to RMB 100,700/mt. SMM #1 nickel prices were between RMB 99,700-100,700/mt, with transactions quiet. Downstream buying interest was low, and transactions were mainly made among traders.