SHANGHAI, Dec. 23 (SMM) –
SHFE 1403 copper contract opened flat at RMB 51,050/mt December 20. The most active copper contract on the SHFE staged volatile movement, drifting lower to RMB 50,880/mt before bouncing back to RMB 51,440/mt, seemingly immune to the 2% decline in Chinese A-shares. The red metal added RMB 330/mt or 0.65% to end the day at RMB 51,380/mt. Trading volumes and positions for the most active contract soared by 60,292 lots and 6,466 lots, respectively. Total trading volumes for SHFE copper were up 75,996 lots, while positions dropped 4,804 lots. SHFE copper gained technical support briefly at the 20-day moving average, but may still meet resistance at several moving averages.
Spot copper in Shanghai was quoted at a discount of RMB 0-40/mt and a premium of RMB 0-60/mt over SHFE 1401 copper contract on Friday. Traded prices were RMB 51,050-51,180/mt for standard-quality copper, and RMB 51,070-51,250/mt for high-quality copper. The price spread between copper with value-added tax (VAT) receipt and that without VAT receipt widened to RMB 80-90/mt. Some preferred goods with VAT receipt. The year-end liquidity crunch kept downstream producers cautious about jumping in. In the afternoon, spot copper was quoted between a discount of RMB 40/mt and a premium of RMB 60/mt over the SHFE current-month copper contract, with traded prices up slightly to RMB 51,100-51,350/mt. SHFE copper stocks declined 12,025 mt to 131,128 mt last week. Copper imports fell significantly due to unfavorable SHFE/LME copper price ratio and as the year comes to an end.
SHFE 1403 aluminum contract opened lower at RMB 14,370/mt last Friday. The light metal moved higher to RMB 14,025/mt in the afternoon session before falling back slightly as investors took profits at highs. Finally, the most active contract on the SHFE gained RMB 10/mt or 0.07% at RMB 14,020/mt. Trading volumes increased 44 lots to 4,862 lots, while positions decreased 446 lots to 48,596 lots.
Spot aluminum in east China followed SHFE aluminum down. Mainstream traded prices were RMB 14,070-14,080/mt in Shanghai, RMB 14,050-14,060/mt in Wuxi, and RMB 14,150-14,160/mt in Hangzhou. Downstream producers stayed out of the market in the belief that prices would fall further. In the afternoon, traded prices moved higher to RMB 14,100/mt on rising SHFE 1401 aluminum contract and tight supply.
Boosted by the rebound in LME lead prices overnight, the most active SHFE 1402 lead contract prices gapped higher at RMB 14,250/mt on last Friday. SHFE lead later reached as high as RMB 14,350/mt from a trough of RMB 14,165/mt in morning trading hours. The metal finally closed Friday up RMB 130/mt or 0.92% at RMB 14,330/mt. Trading volumes gained 850 lots to 2,738 lots, while positions increased 220 lots to 8,154 lots. SHFE lead prices have found solid base support and should fluctuate above the 60-day moving average next week.
On last Friday, goods of Chihong Zn & Ge in Shanghai initially were offered at RMB 14,080/mt, but later were raised to RMB 14,100/mt, boosted by a marginal rise in SHFE lead prices. The lead brand, however, were traded at RMB 14,090/mt in light volumes. A limited amount of Nanfang and Chengyuan resouces, both deliverable brands, were found in the market since the price gap between spot lead and SHFE lead was not favorable for arbitrage. Hanjiang was sold at RMB 13,980/mt, while Mengzi and Humon ex-works hovered between RMB 13,950-13,975/mt. Cargo holders were fairly bullish on lead prices, while lead smelters traded in light volumes under the pressure of cash squeeze. Traders were active in purchasing, but downstream producers were reluctant to build stocks from Shanghai and preferred low-priced goods from the Henan region. As a result, transactions in Shanghai spot lead market were especially light on Friday.
SHFE 1403 zinc prices opened at RMB 15,070/mt, then leveling out, but surging to a record high since August 16 of RMB 15,245/mt as LME zinc prices returned to USD 2,000/mt and due to the entry of a large number of longs. But SHFE zinc prices rolled back some early gains near the end of trading and closed at RMB 15,120/mt, up RMB 50/mt. Trading volumes increased by 75,314 lots, to 110,000 lots, and total positions increased by 25,000 lots, to 100,000 lots.
#0 zinc prices were between RMB 15,030-15,060/mt, with spot discounts of RMB 20-50/mt against SHFE 1403 zinc contract prices. #1 zinc supply was thin, with prices around RMB 14,990/mt, and SMC branded #0 zinc prices were around RMB 15,030/mt. But quotes were limited during the second session as SHFE zinc prices rose sharply. SHFE 1403 zinc contract prices opened at RMB 15,070/mt, and rose by RMB 175/mt, to RMB 15,245/mt, boosted by LME zinc prices overnight, keeping sellers and buyers out of the market.
Spot tin in Shanghai was largely traded at RMB 139,000-141,000/mt last Friday morning. A few deals were done at RMB 138,800/mt. Sluggish consumption weighted prices down. In the afternoon, prices held steady at RMB 139,000-141,000/mt.
In Shanghai, SMM #1 nickel prices were between RMB 94,900-959,000/mt. with tightening cash flows, interbank rate hit a record high, but downstream buyers were optimistic towards the market due to firm nickel prices, with downstream purchasing improving. But transactions made among traders were muted, with mainstream traded prices rising to RMB 95,200-96,200/mt in the afternoon.