SHANGHAI, Mar. 3 (SMM) – The Shanghai Composite Index slumped early last week due to speculation surrounding a bursting of the Chinese property market bubble. SHFE 1405 copper contract prices fell from RMB 50,500/mt, to hit RMB 49,000/mt, and tested a low of RMB 48,980/mt before ending the week down by 2.97%. The SHFE/LME copper price ratio slipped to 7.0. Total traded volumes for SHFE copper contracts surged by 1 million lots and positions also grew by110,000 lots. Night trading for SHFE copper became more brisk. SHFE 1405 copper contract prices may move between RMB 48,800-50,200/mt, but prices are expected to stabilize later, helping the SHFE/LME copper price ratio recover.
In China’s physical markets, standard-quality copper was mainly offered last week at discounts of RMB 280-380/mt against SHFE 1403 copper contract prices, while high-quality copper was quoted at discounts of RMB 180-280/mt. Smelters showed stronger enthusiasm toward exports given the depreciating RMB, and sourced goods from domestic spot markets to fulfill long-term contracts. Losses for copper imports grew to RMB 3,000/mt after SHFE/LME copper price ratio fell to 7.0, causing less imported copper to enter the market. Some downstream buyers went bargain-hunting after spot copper prices fell below RMB 49,000/mt, and although spot discounts narrowed to RMB 130-300/mt ahead of the weekend, demand was still short of supply.