SHANGHAI, Mar. 17 (SMM) – The most active SHFE copper contract followed LME copper prices down to a low of RMB 44,120/mt after starting lower at RMB 44,370/mt, and finished down RMB 400/mt at RMB 44,190/mt in Thursday’s night trading session. During the night session, positions increased by 12,242 lots, and trading volumes maintained at around 520,000 lots. SHFE copper prices dipped to the RMB 44,000/mt mark after briefly touching a high of RMB 44,430/mt due to increasing sell-offs on Friday. The red metal ended down RMB 300/mt or 0.67% at RMB 44,290/mt. Trading volumes shed by 296,000 lots, while positions gained by 21,268 lots. Investors were divided at the RMB 44,000/mt on Friday.
Copper was quoted at a premium of RMB 30-150/mt over SHFE current-month copper contract in Shanghai on Friday. Traded prices were RMB 44,250-44,300/mt for standard-quality copper and RMB 44,280-44,400/mt for high-quality copper. Cargo holders were disinclined to move goods since SHFE 1403 copper contract remained RMB 100/mt lower than SHFE 1404 copper contract which is about to be the most active contract. High-quality copper supply thus decreased, keeping quotations firm and pushing up spot premiums. As price gap between these two contracts narrowed, high-quality copper supply flowed in the market, but standard-quality copper and hydro-copper supply decreased at the same time. As a result, price gap between high-quality copper and inferior copper contracted, so middlemen entered the market to hunt for bargains. Downstream producers had slightly higher buying interest, with trading activity better than Thursday. Investors mostly stayed on the sidelines before the shift of the most active SHFE copper contract due next week. As SHFE copper prices weakened in the afternoon trading hours, cargo holders were more active trading to generate cash at high prices, inflating spot copper supply in the market. Spot copper was offered mostly at a premium of RMB 30-120/mt, and traded slightly lower between RMB 44,150-44,350/mt, with supply exceeding demand. SHFE copper inventories last week grew further by 5,977 mt to 213,297 mt. Spot copper supply in China’s bonded areas accelerated to flow in domestic delivery warehouses since a plunge in copper prices and continued depreciation in the yuan squeezed profits for cargo holders to import copper for financing.