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SMM Base Metals Daily Review (2013-11-14)
Nov 15,2013 09:16CST
price review forecast
SHFE 1401 copper contract prices opened RMB 380/mt lower at RMB 50,420/mt on Thursday.

SHANGHAI, Nov. 15 (SMM) – 

SHFE 1401 copper contract prices opened RMB 380/mt lower at RMB 50,420/mt on Thursday. Some shorts booked profits, easing downward pressure on the contract. The metal climbed to RMB 50,660/mt before retreating and closed RMB 350/mt or 0.69% lower at RMB 50,450/mt. Trading volumes and positions contracted by 119,000 lots and 20,560 lots, respectively.
Spot copper in Shanghai was quoted at a premium of RMB 50-150/mt over SHFE 1311 copper contract on Thursday, with price difference between spot and SHFE copper prices further narrowing ahead of delivery date. Traded prices were RMB 50,670-50,770/mt for standard-quality copper, and RMB 50,730-50,830/mt for high-quality copper. The price gap between imported and domestic standard-quality copper widened. Guixi copper was offered higher than other high-quality copper brands. Traders stayed out of the market since there was little room for arbitrage. Downstream producers built up stocks in small amounts at below RMB 51,000/mt. In the afternoon, most goods available in the market were standard-quality copper and supply was relatively ample. Spot copper was offered at a premium of RMB 50-120/mt, with most deals made at RMB 50,650-50,800/mt. Trading was light in the afternoon. 

January aluminum on the Shanghai Futures Exchange (SHFE), the most active one, opened at RMB 14,210/mt on Thursday. The light metal retreated from RMB 14,200/mt in morning session, but rebounded later in the day thanks to rising Shanghai Composite Index, closing the day flat at RMB 14,220/mt. Some investors stepped back in as SHFE aluminum has shown signs of stopping falling. Trading volumes increased 650 lots to 9,146 lots, and positions also added 1,708 lots to 44,358 lots. 

Spot aluminum prices were RMB 14,370-14,380/mt in Shanghai, a discount of RMB 20-30/mt over SHFE 1311 aluminum contract. Prices were RMB 14,380-14,390/mt and Wuxi, and RMB 14,360-14,370/mt in Hangzhou. Cargo holders became anxious to liquidate inventories out of bearishness over future prices. However, downstream producers decided not to step in until SHFE 1312 aluminum contracts become the new current-month contract. Trading was subdued. In the afternoon, a slight rise in base metals prices fuelled buying interest among a few market players in spot aluminum market.  

On November 14, SHFE 1401 lead contract became the most active one and started at RMB 14,090/mt. SHFE lead for January delivery then rallied to RMB 14,150/mt with LME lead leveling out, but only hovered at RMB 14,095-14,125/mt for the rest of the day given a lack of market confidence and resistance at several moving averages. The prices finally ended at RMB 14,120/mt, up RMB 55/mt or 0.39%. Traded volumes increased by 874 lots to 1,746 lots, while positions were up 586 lots to 9,446 lots.
Spot lead prices in China held steady after SHFE lead prices rose. Goods of Chihong Zn & Ge was sold at RMB 14,000/mt, with a discount of RMB 110/mt against SHFE 1401 lead contract prices. Prices for Nanfang were RMB 13,970-13,980/mt, up about RMB 20-30/mt from Wednesday. Humon quoted at RMB 13,970/mt, while Qinyuan’s resources were offered at RMB 13,950/mt. Smelters were less willing to sell at prices below RMB 14,000/mt, but purchases by downstream consumers improved slightly. 

SHFE 140 zinc contracts became the most actively traded contracts, with prices opening at RMB 14,785/mt, and then edged up with LME zinc prices, rising to as high as RMB 14,845/mt in the morning. In the afternoon, SHFE zinc prices mostly moved around RMB 14,845/mt, touching RMB 14,860/mt and closed at RMB 14,830/mt, up RMB 45/mt or 0.3%. Trading volumes increased by 684 lots, to 29,806 lots, and total positions increased by 356 lots, to 91,594 lots.

#0 zinc prices were between RMB 14,900-14,940/mt, with spot premiums between RMB 90-120/mt against SHFE 1401 zinc contract prices. #1 zinc prices were around RMB 14,870/mt. SHFE zinc prices inched up after opening, with spot premiums narrowing. Shuangyan branded #0 zinc prices were between RMB 14,930-14,940/mt. SHFE zinc prices rose further during the second session, with the high-end of the price range RMB 14,950/mt, but transactions were muted. Other domestic brands #0 zinc prices were between RMB 14,900-14,920/mt, with spot premiums of SMC #0 zinc prices RMB 70-80/mt. Downstream buyers are mostly bearish as zinc prices hovered weakly, and smelters are moving goods normally, with some holding back goods. Traders were watching on the sidelines, leaving transactions muted.

In Shanghai spot tin market, prices for well-known brands continued to fall on Thursday, with mainstream traded prices at RMB 143,800-146,500/mt. Nanshan, Jinlong, Yunxiang, and Yinsheng were sold at RMB 143,800-144,000/mt, while transactions for goods of Yunnan Tin Group, Yunheng, and Yunshan were made at RMB 144,000-146,000/mt. A lack of clear clue from LME tin prices left strong wait-and-see mood in the market. Trading was quiet.

In Shanghai, inquiries were brisk. Some bullish traders were holding back goods, keeping quotes firm between RMB 96,100-97,100/mt. Those pessimistic traders were moving goods actively, with low-price goods availability limited. SMM #1 nickel prices were between RMB 95,600-96,600/mt.



SHFE copper prices

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