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SMM Base Metals Market Daily Review (2014-3-4)
Mar 5,2014 11:43CST
price review forecast
The most active SHFE 1405 copper contract started Monday’s night session RMB 390/mt lower at RMB 48,680/mt, and then dipped to RMB 48,600/mt, pressured by sell-offs.

SHANGHAI, Mar. 5 (SMM) –

The most active SHFE 1405 copper contract started Monday’s night session RMB 390/mt lower at RMB 48,680/mt, and then dipped to RMB 48,600/mt, pressured by sell-offs. The red metal later bounced back around RMB 48,700/mt after shorts booked profits, and finally closed down RMB 260/mt at RMB 48,710/mt. During the night session, trading volumes tumbled by more than 240,000 lots, and positions expanded by 2,638 lots. SHFE copper prices went lower on Tuesday to find support at RMB 48,730/mt after opening at RMB 48,750/mt, but rallied to an intraday high of RMB 49,100/mt at the tail of the trading, and finished up RMB 20/mt or 0.04% at RMB 48,990/mt. Trading volumes shrank by 66,526 lots to 245,000 lots, and positions shed by 12,540 lots to 312,000 lots. SHFE copper prices followed the 5-day moving average down, with the market dominated by bearish sentiment. However, market concern is easing since an oversold situation has appeared, and technical indicators are also relatively positive. Investors should heed the support level around RMB 48,400/mt.

Spot copper was offered on Tuesday at discounts of RMB 60-160/mt over the most active SHFE copper contract in Shanghai. Traded prices were between RMB 48,550-48,580/mt for standard-quality copper and RMB 48,600-48,670/mt for high-quality copper. SHFE copper prices stabilized at low levels, soothing market fears of possible price declines. Cargo holders thus narrowed spot discounts and maintained sufficient copper supply, driving up transactions as against Monday. Speculators were active in early trading and purchased copper at low prices, which pushed up copper prices to some extent. The significantly narrower discounts restrained trading activity of middlemen. More downstream producers went bargain-hunting on Tuesday. Spot discounts are expected to narrow further.

SHFE 1405 aluminum contract edged down to RMB 13,185/mt after starting Monday’s night session at RMB 13,210/mt, but then moved higher to close at RMB 13,215/mt on short-covering. 5,120 lots were traded during the night hours, and positions added 460 lots to 95,674 lots. The most active contract erased gains after touching RMB 13,245/mt due to profit taking on Tuesday morning, but recovered losses afterwards to end RMB 5/mt lower at RMB 13,265/mt. 10,456 lots were traded during the day session, with positions down 462 lots to 95,212 lots.

Spot aluminum largely traded at RMB 12,810-12,830/mt in Shanghai on Tuesday, RMB 12,790-12,810/mt in Wuxi, and RMB 12,840-12,850/mt in Hangzhou. Some buyers went bargain hunting after SHFE 1403 aluminum contract prices rebounded, but most were cautious out of bearishness. In the afternoon, SHFE current-month aluminum contract rose further, but cargo holders still kept offers unchanged at RMB 12,810-12,820/mt due to a lack of confidence over future prices. A few traders stepped up purchases in the belief that prices will rise.

The most active SHFE 1404 lead contract started at the lowest level of RMB 13,770/mt in Monday’s night session, and finished down RMB 25/mt or 0.18% at RMB 13,810/mt. Trading volumes hit the lowest of 38 lots since the night session was launched. SHFE 1404 lead contract prices were dragged down by declining LME lead prices after opening at RMB 13,810/mt. The metal, however, rebounded to a high of RMB 13,850/mt during the afternoon trading session due to an increasing number of shorts liquidating positions, and ended up RMB 5/mt or 0.04% at RMB 13,840/mt. Trading volumes shrunk by 1,046 lots to 1,334 lots, and positions gained by 254 lots to 9,328 lots.

In China’s physical lead markets on Tuesday, goods from Chihong Zn & Ge and Nanfang traded at RMB 13,750/mt with discounts of RMB 65/mt over the most active SHFE lead contract. Yubei and Humon resources were sold between RMB 13,730-13,740/mt. Yuguang and Chihong Zn & Ge warrants traded at discounts of RMB 40/mt and RMB 60/mt, respectively, against SHFE 1404 lead contract prices. Tongguan and Chengyuan lead supply was sold at premiums of RMB 30/mt over SHFE 1403 lead contract prices. Lead smelters became slightly disinclined to move goods after lead prices extended loss, and downstream purchases decreased sharply on Tuesday. 

SHFE 1405 zinc contract prices opened at RMB 15,070/mt on Monday evening, and then rose after dipping to RMB 15,050/mt, and finally closing at RMB 15,100/mt, down RMB 10/mt or 0.07%. Trading volumes increased by 2,762 lots to 14,328 lots, and total positions decreased by 672 lots to 109,696 lots. SHFE 1405 zinc contract prices opened at RMB 15,095/mt on Tuesday, and dipped to USD 15,070/mt, dragged down by falling LME zinc prices. But since LME zinc prices rose later the day and as large number of shorts closed positions, SHFE 1405 zinc contract prices rallied and touched an intraday high of RMB 15,140/mt, and closing at RMB 15,140/mt, up RMB 30/mt or 0.2%. Trading volumes increased by 1,296 lots, to 32,696 lots, and total positions increased by 2,546 lots, to 112,242 lots.

#0 zinc prices were between RMB 14,860-14,900/mt, with spot discounts between RMB 200-240/mt against SHFE 1405 zinc contract prices. #1 zinc prices were between RMB 14,810-14,820/mt. SHFE 1405 zinc contract prices opened at RMB 15,095/mt on Tuesday, rising slightly from the previous trading day, allowing spot discounts to expand by RMB 10/mt as spot prices did not climb. Both smelters and cargo holders were moving goods actively, but downstream buying interest was low despite zinc prices dropped to their lowest for the year. Shuangyan branded #0 zinc prices were between RMB 14,890-14,900/mt, with RMB 14,860/mt for Jiulong, Qinxin, Feilong and SMC branded #0 zinc.

In Shanghai, spot tin largely traded between RMB 140,500-143,000/mt on Tuesday. Trading was muted as falling LME tin prices soured market sentiment. Prices were RMB 143,000/mt for Yunxi brand tin, and RMB 141,000-141,500/mt for Yunheng and Yunshan brand tin. Tin of other brands traded at the lower end of the price range at RMB 140,500-141,000/mt. 

In Shanghai, SMM #1 nickel prices were between RMB 93,100-94,100/mt. Spot nickel prices in China remained sluggish in the morning despite rising LME nickel prices, with transactions mainly made among traders. Downstream buyers remained cautious, with spot prices rising to RMB 93,400-94,400/mt in the afternoon.


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

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