SHANGHAI, Mar. 7 (SMM) –

Copper
The most active SHFE copper contract started RMB 10/mt higher at RMB 49,230/mt, and then rose as high as RMB 49,430/mt at Wednesday’s night session. The red metal later fell to RMB 48,970/mt, hovering around RMB 49,240/mt, and finally closed down RMB 170/mt at RMB 49,140/mt. During the night session, trading volumes shrunk by more than 238,000 lots, and positions expanded by over 7,000 mt. SHFE copper prices opened at RMB 49,210/mt on Thursday, and later slipped to an intraday day low of RMB 48,970/mt due to the lack of impetus. During the afternoon trading session, SHFE copper rallied to RMB 49,260/mt, and finished down RMB 170/mt or 0.34% at RMB 49,140/mt. Trading volumes shed 75,574 lots to 255,000 lots, and positions decreased 2,546 lots to 275,000 lots. Positions for SHFE 1406 copper contract rose 12,926 lots to 193,000 lots, and the contract is likely to become the most active SHFE copper contract next week. SHFE copper prices faced resistance at the 10-day moving average, but found support at the 5-day moving average on Thursday.

In the Shanghai physical market, copper was offered Thursday at discounts of RMB 80-160/mt over the most active SHFE copper contract. Traded prices were RMB 48,760-48,960/mt for standard-quality copper and RMB 48,800-49,060/mt for high-quality copper. SHFE continued to fall on Thursday to approach a low of RMB 49,000/mt, with massive sell-offs on the market. Discounts of high-quality copper were lowered to around RMB 100/mt, but standard-quality copper was still held firm. Price gap between high-quality copper and standard-quality copper even narrowed to RMB 20-30/mt, and trading for high-quality copper was brisk due to middlemen speculators. SHFE 1403 copper contract later fell below the RMB 49,000/mt mark, and an increasing number of downstream producers went bargain-hunting. Most investors sold off goods intensively on a bearish view towards copper prices, presaging that the overhang of copper supply is unlikely to improve in the near term. Driven by an uptick in SHFE copper prices during the afternoon trading hours, traded prices for high-quality copper bounced back above RMB 49,000/mt, leaving spot discounts narrowing to RMB 60-80/mt. Standard-quality copper, however, traded below RMB 49,000/mt, with discounts of RMB 120-140/mt, but some downstream producers still had buying interest.

Aluminum
SHFE 1405 aluminum contract slid to RMB 13,275/mt after starting Wednesday’s night session higher at RMB 13,320/mt, and closed down RMB 10/mt at RMB 13,285/mt. Trading volumes during the night hours totaled 3,292 lots and positions added 254 lots to 97,434 lots. The most active contract fell further to RMB 13,225/mt due to profit taking on Thursday before finishing at RMB 13,240/mt, down RMB 55/mt or 0.41%. Trading volumes during the daytime session totaled 14,482 lots, and positions were up 402 lots to 97,842 lots. 

Spot aluminum largely traded at RMB 12,800-12,810/mt in Shanghai on Thursday, RMB 12,760-12,780/mt in Wuxi, and RMB 12,820-12,830/mt in Hangzhou. SHFE 1403 aluminum contract prices surrendered gains built up yesterday, souring market sentiment. Downstream producers bought to need, while traders stayed out of the market. In the afternoon, suppliers cut quotes to RMB 12,790/mt, but raised offers to RMB 12,800/mt after SHFE aluminum prices stabilized. Trading was thin.

Lead
The most active SHFE 1404 lead contract hovered around RMB 13,920/mt after starting at RMB 13,890/mt, and finished up RMB 10/mt or 0.07% at RMB 13,920/mt at Wednesday’s night session. During the night session, trading volumes were only 36 lots, and positions gained by only 18 lots to 9,578 lots. Dragged down by a fall in LME lead prices, SHFE lead prices broke below the RMB 13,800/mt mark, and fell to a fresh yearly low of RMB 13,710/mt at the tail of the trading. The metal closed down RMB 135/mt or 0.97% at RMB 13,775/mt. Trading volumes contracted 146 lots to 1,690 lots, and positions gained 454 lots to 10,014 lots. Given bearish technical indicators, SHFE lead prices should test support at RMB 13,700/mt.

Chihong Zn & Ge and Yubei warrants traded at RMB 13,780/mt in Shanghai, and later were sold at RMB 13,760/mt with discounts of around RMB 70/mt over the most active SHFE lead contract on Thursday after SHFE lead prices fell. Humon resources traded at RMB 13,760/mt. Following a fall in lead prices, lead smelters were less active in moving goods, and traders were also disinclined to trade. Downstream producers stayed on the sidelines, leaving transactions light on Thursday. 
 
Zinc
SHFE 1405 zinc contract prices opened at RMB 15,285/mt on Wednesday evening. Dragged down by falling LME zinc prices, SHFE 1405 zinc contract prices inched down to RMB 15,250/mt as a large number of longs left the market, and finally closing at RMB 15,250/mt, down RMB 30/mt or 0.2%. Trading volumes decreased by 35,384 lots to 16,082 lots, and total positions increased by 1,072 lots to 124,624 lots. SHFE 1405 zinc contract prices opened at RMB 15,250/mt on Thursday, and then dipped to RMB 15,145/mt as a large number of longs left the market, and hovering between RMB 15,170-15,190/mt, and closing at RMB 15,200/mt, down RMB 80/mt or 0.52%. Trading volumes decreased by 56,486 lots, to 62,060 lots, and total positions decreased by 3,818 lots, to 119,734 lots.

#0 zinc prices were between RMB 14,930-14,960/mt, with spot discounts between RMB 200-230/mt against SHFE 1405 zinc contract prices. #1 zinc prices were between RMB 14,870-14,880/mt. SHFE 1405 zinc contract prices opened at RMB 15,250/mt on Thursday, then edged down during the first session, causing spot discounts to narrow to RMB 200/mt, and some traders to release goods. Shuangyan branded #0 zinc prices dropped from RMB 15,000/mt to RMB 14,950/mt. During the second session, SHFE zinc prices stabilized, with traders actively moving goods and some of them replenishing stocks at lower prices. Downstream buying interest improved, but transactions muted. Shuangyan branded #0 zinc prices were between RMB 14,950-14,960/mt, with RMB 14,930/mt for Jiulong and Feilong branded #0 zinc, and RMB 14,940/mt for Qilin branded #0 zinc.

Tin
In Shanghai, spot tin largely traded between RMB 140,800-143,000/mt on Thursday. Prices were RMB 143,000-143,500/mt for Yunxi brand tin, and RMB 140,800-141,500/mt for other brands. Trading activity was thin.

Nickel
In Shanghai, SMM #1 nickel prices were between RMB 94,300-95,300/mt. Spot nickel prices were sluggish between RMB 94,100-95,100/mt. Downstream purchasing was modest, with transactions mainly made among traders.