SHANGHAI, Mar. 6 (SMM) – The most active SHFE 1405 copper contract started RMB 200/mt higher at RMB 49,010/mt in Tuesday’s night session, and then hovered around RMB 49,100/mt after testing a low of RMB 48,930/mt. Driven by shorts liquidating positions and strong buying support, the red metal bounced back to the RMB 49,280 – 49,450/mt band, and finished up RMB 360/mt at RMB 49,370/mt. During the night session, trading volumes decreased to less than 70,000 lots, and positions contracted by 576 lots. SHFE copper prices dipped to RMB 49,230/mt after opening at RMB 49,360/mt, and later rose back by RMB 150/mt. The most active SHFE copper contract advanced to an intraday high of RMB 49,630/mt in the afternoon trading session, and finally ended up RMB 570/mt at RMB 49,380/mt. Trading volumes expanded by 85,122 lots to 330,000 lots, and positions shed 24,344 lots to 278,000 lots. SHFE copper prices still have impetus to go up, but will face stiff resistance at RMB 49,800/mt.
Spot copper was offered on Wednesday at discounts of RMB 50-150/mt over the most active SHFE copper prices in the Shanghai physical market. Traded prices were RMB 49,020-49,100/mt for standard-quality copper and RMB 49,080-49,200/mt for high-quality copper. Encouraged by a rebound in SHFE copper prices, spot copper prices rose back above RMB 49,000/mt. A larger amount of high-quality copper flowed into the market since cargo holder had stronger willingness to trade for cash. There was little scope for spot discounts to narrow further, with less than RMB 50/mt price gap between standard-quality copper and hydro-copper. Standard-quality copper producers, especially those in China, held prices firm on hopes of narrower spot discounts. Downstream purchases were less than Tuesday since they held the rebound in copper prices was transient, but some middlemen with adequate liquidity went bargain-hunting. Spot copper prices failed to follow rising SHFE copper prices up due to the lack of impetus and market confidence on Wednesday.