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SMM Base Metals Market Daily Review (2013-10-31)
Nov 1,2013 09:27CST
price review forecast
SHFE 1401 copper contract prices opened RMB 100/mt higher at RMB 51,960/mt on Thursday.

SHANGHAI, Nov. 1 (SMM) –

SHFE 1401 copper contract prices opened RMB 100/mt higher at RMB 51,960/mt on Thursday. The red metal was range-bound between RMB 51,800-52,000/mt, finding a session low of RMB 51,660/mt on selloff and falling LME copper. SHFE 1401 copper contract shed RMB 50/mt or 0.1% to close at RMB 51,810/mt. Trading volumes were off 5,716 lots, while positions were up 4,458 lots. SHFE copper for January delivery may stage a rally in the near term due to strong technical support.
Spot copper in Shanghai was quoted at a contango of RMB 60-180/mt over SHFE 1311 copper contract Thursday morning. Traded prices were RMB 51,860-51,940/mt for standard-quality copper, and RMB 51,920-52,060/mt for high-quality copper. SHFE copper was mired. Most suppliers stayed out of the market on the last day of the month. Holders of hydro-copper held offers firm due to tight supply. Traders held a wait-and-see stance against cash squeeze, while downstream producers purchased in small amounts. In the afternoon, cargo holders became less willing to move goods, with contango for spot copper narrowing to RMB 10-160/mt. Traded prices nudged lower to RMB 51,750-52,000/mt. Some traders started purchasing, but overall trading remained modest.
January aluminum on the Shanghai Futures Exchange (SHFE), the most active one, opened at RMB 14,445/mt on Thursday. The light metal climbed to RMB 14,460/mt before immediately falling back to RMB 14,390/mt as positive news has faded. SHFE 1401 aluminum contract ended the day down RMB 45/mt at RMB 14,400/mt. Trading volumes increased 646 lots to 7,740 lots, while positions dropped 2,292 lots to 54,642 lots. Key technical indicators are pointing downward, presaging further declines on the horizon in the absence of positive news.  
Spot aluminum followed SHFE aluminum down RMB 50/mt. Traded prices were RMB 14,430-14,450/mt in Shanghai and Wuxi, and RMB 14,430-14,440/mt in Hangzhou. Those with ample cash at hand entered the market, but their purchases were limited. In the afternoon, aluminum prices inched down, except prices for brand aluminum ingot. Trading was moderate.   
The most active SHFE 1312 lead contract prices fell significantly, down 0.66% on Thursday, with the loss only next to SHFE zinc prices. Investors booked profits at highs after the Federal Reserve kept its monetary policies unchanged at the October meeting, fueling selling pressure. As a result, SHFE lead for December delivery followed LME lead prices down to start at RMB 14,430/mt Thursday and dipped as low as RMB 14,005/mt. However, SHFE lead prices rallied and move between RMB 14,340-14,380/mt, to end at RMB 14,375/mt, down RMB 95/mt on Thursday. Transactions increased 840 lots to 1,490 lots, while positions declined 238 lots to 11,440 lots.  
In China’s spot lead market, transactions fell dramatically on Thursday as most market participants were in a wait-and-see attitude on the last trading day in October and SHFE lead prices opened RMB 100/mt lower. In Shanghai, only a few brands were available in the market, among which goods of Chihong Zn & Ge were traded mostly at RMB 14,250/mt, a discount of roughly RMB 120/mt over the most active SHFE lead prices. Nanfang’s resources were sold just RMB 10/mt higher at RMB 14,260/mt, while Hanjiang was traded at RMB 14,240/mt. Downstream producers stayed on hold when spot lead prices fell, dampening transactions.
SHFE 1401 zinc contract prices opened at RMB 15,160/mt, once falling by the daily limit to RMB 14,560/mt, but then rallying to RMB 15,000/mt. The Shanghai Composite Index weakened in the afternoon, dragging down SHFE zinc prices from RMB 15,030/mt, to RMB 14,970/mt, and closing at RMB 14,990/mt, down RMB 180/mt or 1.19%. Trading volumes increased by 39,118 lots, to 109,874 lots, and total positions decreased by 27,276 lots, to 115,394 lots.
#0 zinc prices were between RMB 15,070-15,150/mt, with spot premiums between RMB 70-130/mt against SHFE 1401 zinc contract prices, up RMB 100/mt. #1 zinc prices were around RMB 15,030/mt. SHFE 1401 zinc contract prices opened at RMB 15,160/mt, then tumbling to RMB 14,560/mt. Spot prices dropped modestly as cargo holders held prices firm. Shuangyan branded #0 zinc prices between RMB 15,120-15,150/mt, and Qilin branded #0 zinc prices were around RMB 15,100/mt, with Jiulong branded #0 zinc prices around RMB 15,090/mt. Downstream buyers were cautious due to wide zinc price volatility, with trading quiet.
In Shanghai spot tin market, prices drifted lower on Thursday, with non-leading brands, such as Yinsheng and Nanshan, traded at RMB 145,500-146,000/mt. Yunheng and Tianti were sold at RMB 147,000/mt. Traded prices for goods of Yunnan Tin Group were between RMB 148,500-149,500/mt. Quotations were in disorder in the afternoon against muted trading, but transactions remained light despite falling quotes. Downstream enterprises were not interested in purchasing by month’s end.
In Shanghai, transactions were muted. SMM #1 nickel prices were between RMB 99,000-100,000/mt. Trades of Jinchuan nickel were brisk, with prices between RMB 99500-100200/mt. Despite traders lowered their quotes, buyers still lacked interest in purchasing. Prices of deliverable Jinchuan nickel were between RMB 99,900-100,000/mt, with the price spread with Russian nickel around RMB 1,000/mt. 
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