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SMM Base Metals Daily Review (2013-11-20)
Nov 21,2013 10:06CST
price review forecast
SHFE 1402 opened RMB 210/mt higher at RMB 49,980/mt on Wednesday, helped by rising LME copper overnight. Some investors closed bear positions.

SHANGHAI, Nov. 21 (SMM) –

SHFE 1402 opened RMB 210/mt higher at RMB 49,980/mt on Wednesday, helped by rising LME copper overnight. Some investors closed bear positions, pushing the most active contract up to RMB 50,500/mt. The red metal, however, fell back to hover above RMB 50,200/mt after some investors closed long positions. SHFE 1402 copper contract rebounded again at the tail of the session before closing RMB 590/mt or 1.19% higher at RMB 50,360/mt. Trading volumes and positions for the SHFE copper for February delivery were down 75,498 lots and 10,690 lots, respectively. Total traded volumes for SHFE copper fell by 150,000 lots, while total positions were down 23,830 lots. 
Spot copper in Shanghai was quoted at a premium of RMB 90-190/mt over SHFE 1312 copper contract on Wednesday. Traded prices were RMB 50,680-50,740/mt for standard-quality copper, and RMB 50,740-50,820/mt for high-quality copper. The price spread between standard-quality copper and high-quality copper was limited, but trading was thin. Some traders bought spot copper while selling SHFE copper. Downstream producers stayed out of the market following bargain hunting a day earlier. In the afternoon, cargo holders slightly lower price offers to a premium of RMB 50-180/mt over the SHFE 1312 copper contract. Copper supply increased, with proportion of standard quality copper rising. Transactions were sparse.
January aluminum on the SHFE, the most active one, opened at RMB 14,205/mt on Wednesday. The contract crept higher on short-covering and rose further above the 5-day and 10-day moving averages after the Shanghai Composite Index returned above 2,200 points. Finally, the light metal finished up RMB 95/mt or 0.67% at RMB 14,285/mt. Trading volumes grew 1,644 lots to 6,548 lots, but positions fell 1,072 lots to 43,998 lots. The positions of SHFE 1401 aluminum contracts are only 100 lots less than those of SHFE 1402 aluminum contracts, meaning the latter may shift to the new most active contract today.  
SHFE 1312 aluminum contract climbed above the 5-day moving average to near RMB 14,310/mt before lunchtime. Spot aluminum prices were RMB 14,350-14,370/mt in Shanghai, RMB 14,350-14,370/mt in Wuxi, and RMB 14,330-14,350/mt in Hangzhou. Rising SHFE aluminum allowed spot aluminum suppliers to hike offers, but consumption remained lackluster, preventing aluminum prices from rising appreciably. Bearish sentiment still dominates the market. In the afternoon, SHFE 1312 aluminum contract rose to RMB 14,365/mt. This enabled cargo holders to hold back goods at low prices, pushing spot aluminum traded prices up over RMB 10/mt.
Underpinned by stabilizing LME lead price, the most active SHFE 1401 lead contract price rebounded above the RMB 14,000/mt milestone after starting at RMB 13,975/mt on Wednesday. SHFE lead touched a high of RMB 14,020/mt and finally ended the day at RMB 14,015/mt, up RMB 55/mt or 0.39%. Transactions fell 810 lots to 958 lots, while open interest gained 188 lots to 10,520 lots. SHFE lead price continues to move below all moving averages on Wednesday.
In Shanghai spot lead market, goods of Chihong Zn & Ge were offered at RMB 13,960/mt and traded at RMB 13,940/mt on Wednesday. Due to amply supply, Nanfang and Chengyuan resources were quoted at a discount of RMB 20/mt over SHFE 1312 lead contract prices and traded between RMB 13,920-13,930/mt. Humon was sold at RMB 13,900/mt. On Wednesday, buying interest of downstream producers increased to some extent with stabilizing lead prices, leaving transactions better than Tuesday. 
Pushed by LME zinc prices overnight, SHFE 1402 zinc contract prices opened high at RMB 14,830/mt, and then rose to RMB 14,860/mt as a large number of buyers entered the market. In the afternoon, LME zinc prices and Shanghai Composite Index climbed, pushing up SHFE zinc prices to RMB 14,895/mt, but falling at the end of trading, closing the day at RMB 14,870/mt, up RMB 85/mt. Trading volumes decreased by 2,954 lots, to 28,246 lots, and total positions increased by 1,242 lots, to 114,000 lots.
#0 zinc prices were between RMB 14,920-14,960/mt, with spot premiums between RMB 70-100/mt against SHFE 1402 zinc contract prices. Lida branded #1 zinc prices were around RMB 14,910/mt, and spot premiums of Belgian #0 zinc prices were RMB 50/mt, trading at RMB 14,900/mt, with spot premiums of KZ and SMC #0 zinc RMB 70/mt against SHFE 1402 zinc contract prices, trading around RMB 14,920/mt. Cargo holders were moving goods actively, while downstream buyers purchased goods on an as-needed basis, with transactions muted. 
Spot tin prices were mainly between RMB 143,500-146,000/mt on Wednesday, with supply for low-priced goods increasing. Some tin smelters lowered quotes by year’s end due to sales pressure. That, combined with anemic demand downstream, drove tin prices to fall further. Most of goods of Nanshan and Jinlong were sold at RMB 143,500/mt, while prices for Yunnan Tin Group held steady at RMB 146,000/mt. 
In Shanghai, SMM #1 nickel prices were between RMB 94,700-95,700/mt, with transactions muted and mainly made among traders. Market players lacked arbitrage opportunities as LME nickel prices leveled out. Downstream buyers purchased on an as-needed basis, with daily average trading volumes around 100/mt. 


SHFE copper prices

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