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SMM Base Metals Market Daily Review (2014-2-28)
Mar 3,2014 11:23CST
price review forecast
SHFE 1405 copper contract prices started lower at RMB 49,230/mt in last Thursday’s night session due to prevailing bearish sentiment in the market.

SHANGHAI, Mar. 3 (SMM) –

SHFE 1405 copper contract prices started lower at RMB 49,230/mt in last Thursday’s night session due to prevailing bearish sentiment in the market. The contract prices later sank to an intraday low of RMB 48,930/mt, and finally closed at RMB 49,210/mt. During the night session, positions decreased over 2,000 lots, and the market remained in an oversold condition. During day trading on Friday, SHFE 1405 copper contract prices hit a high of RMB 49,490/mt, but dropped to RMB 49,030/mt due to depreciation of RMB and declines in Chinese stock market. The May-delivery copper on SHFE finally finished the session at RMB 49,280/mt, down RMB 60/mt or 0.12%. Traded volumes shrank by 41,286 lots to 387,000 lots, and positions fell 6,900 lots to 302,000 lots. Investors were cautious before the release of China’s official manufacturing PMI and the NPC and CPPCC sessions.

Spot copper in Shanghai was offered at discounts of RMB 120-280/mt against the most active SHFE copper contract prices on Friday. Standard-quality copper was sold at RMB 48,900-49,150/mt, and high-quality copper at RMB 48,980-49,260/mt. Supply remained ample, and sellers of high-quality copper no long held prices firm. Traders showed limited buying interest. With RMB weakening to about 6.19 per dollar, and SHFE copper prices falling by around RMB 200/mt, the market again came under selling pressure. Spot discounts for high-quality copper thus expanded, but those for standard-quality copper narrowed as some downstream buyers went bargain-hunting. Spot discounts may narrow next week as cargo holders will be in no rush to sell at the beginning of a new month. During the afternoon trading session, SHFE copper prices rebounded slightly, but trading activity was light. Spot copper in Guixi traded at broader discounts of RMB 150/mt, and discounts of standard-quality copper also expanded to RMB 280-300/mt. SHFE copper inventories increased 4,175 mt to 198,286 mt, indicative of growing supply. 

SHFE 1405 aluminum contract crept up to RMB 13,390/mt after opening last Thursday’s night session at RMB 13,360/mt, but then erased gains to end at RMB 13,385/mt. 2,502 lots were traded during the night hours, and positions added 434 lots to 91,142 lots. The most active contract dropped all the way down to RMB 13,330/mt in last Friday’s afternoon trading before finishing the day RMB 40/mt or 0.3% lower at RMB 13,350/mt. 9,684 lots were traded during the day session, with positions up 1,542 lots to 92,684 lots. 

Spot aluminum largely traded at RMB 12,930-12,940/mt in Shanghai last Friday, RMB 12,930-12,950/mt in Wuxi, and RMB 12,940-12,950/mt in Hangzhou. Downstream producers showed greater willingness to enter the market, but any increase in volumes traded was limited by tightening month-end liquidity. In the afternoon, falling supply allowed cargo holders to raise offers to RMB 12,940-12,960/mt, but trading was thin.   

SHFE lead prices dipped to RMB 13,850/mt after starting at RMB 13,880/mt in Thursday’s night session, and finally closed down RMB 15/mt at RMB 13,880/mt. During the night session, trading volumes were only 42 lots, and positions were off 2 lots to 8,524 lots. SHFE lead prices hovered most of Friday between RMB 13,880-13,900/mt, and at last finished down RMB 5/mt at RMB 13,890/mt. Trading volumes were 1,102 lots, and positions gained 280 lots to 8,806 lots. SHFE lead prices have limited room to fall given prevailing bullish sentiment in the market.

In the Shanghai physical lead market on Friday, goods from Chihong Zn & Ge and Nanfang traded between RMB 13,820-13,830/mt, with discounts of around RMB 70/mt over the most active SHFE lead contract price. Chengyuan resources were sold at premiums of RMB 20/mt over SHFE 1403 lead contract prices, and Humon traded at RMB 13,790/mt. Cargo holders were active in moving goods, but downstream producers had little buying interest against tight liquidity by the end of February. Transactions were fairly soft this week. 

SHFE 1405 zinc contract prices opened higher at RMB 15,105/mt on Thursday evening, and edged up to RMB 15,160/mt with strengthening LME zinc prices and a large number of shorts leaving the market, and finally closing at RMB 15,150/mt, up RMB 10/mt or 0.07%. Trading volumes decreased by 1,424 lots to 18,214 lots, and total positions increased by 500 lots to 101,854 lots. SHFE 1405 zinc contract prices opened at RMB 15,155/mt on Friday, and dipped to USD 15,105/mt after touching USD 15,185/mt, dragged down by LME zinc prices, and closing at RMB 15,135/mt, down RMB 5/mt or 0.03%. Trading volumes decreased by 1,156 lots, to 28,896 lots, and total positions increased by 6,666 lots, to 108,520 lots.

#0 zinc prices were between RMB 14,900-14,940/mt, with spot discounts between RMB 210-250/mt against SHFE 1405 zinc contract prices. #1 zinc prices were around RMB 14,850/mt. SHFE 1405 zinc contract prices opened at RMB 15,155/mt on Friday, hovering around RMB 15,165/mt during the first session, up RMB 20-30/mt from Thursday, but spot discounts expanded further due to soft demand. Shuangyan branded #0 zinc prices were around RMB 14,940/mt, with spot discounts of RMB 220/mt against SHFE 1405 zinc contract prices. During the second session, SHFE 1405 zinc contract prices edged down, with spot zinc prices falling by RMB 10/mt. Traders exited the market at the week’s end, while downstream buying interest remained low, keeping trades muted. Shuangyan branded #0 zinc prices were between RMB 14,930-14,940/mt, with RMB 14,920/mt for Yuguang branded #0 zinc, and RMB 14,900-14,910/mt for Jiulong and Qinxin branded #0 zinc.

Thin trading was reported in Shanghai spot tin market last Friday. Most deals were done at RMB 141,500-144,000/mt. Cheap goods of RMB 141,000/mt were seen, but such goods were quickly sold out. Market activity petered out as gains in LME tin prices slowed down.  

In Shanghai, SMM #1 nickel prices were between RMB 93,000-94,000/mt. Jinchuan raised nickel prices by RMB 600/mt to RMB 94,500/mt, with Jinchuan nickel prices between RMB 93,900-94,100/mt, and Russian nickel prices RMB 1,000/mt below Jinchuan nickel prices. Downstream buying interest was low, with transactions mainly made among traders.


SHFE copper prices
SHFE aluminum prices
lead prices
zinc prices
tin prices
nickel prices

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