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.
SHFE 1406 aluminum contract edged lower to RMB 13,130/mt after starting last Thursday’s night session at RMB 13,190/mt, and ended the session at RMB 13,140/mt. Trading volumes during the night hours totaled 11,834 lots, and positions shrank 2,484 lots to 105,464 lots. During last Friday’s daytime session, the most active contract made a brief foray to RMB 13,195/mt before retreating below the daily moving average and closing down RMB 90/mt or 0.68% at RMB 13,145/mt. Trading volumes during the daytime hours totaled 12,002 lots, and positions were up 798 lots to 106,262 lots. Bearish sentiment prevailed due to worries over demand in China and Ukraine crisis.
Spot aluminum largely traded at RMB 12,640-12,650/mt in Shanghai and Wuxi last Friday, and RMB 12,660-12,670/mt in Hangzhou. Some traders stepped up purchases as SHFE 1403 aluminum contract was RMB 100/mt lower than SHFE 1404 aluminum contract. Downstream producers, however, still bought to need out of pessimism. In the afternoon, offers were little changed, but transactions were muted.
SHFE 1405 zinc contract prices opened low at RMB 14,750/mt on Thursday evening, then fluctuated weakly due to weakening LME zinc prices, and finally closing at RMB 14,790/mt, down RMB 50/mt or 0.34%. Trading volumes decreased by 8,972 lots to 13,876 lots, and total positions decreased by 374 lots to 90,464 lots.
SHFE 1405 zinc contract prices opened low at RMB 14,790/mt on Friday, climbing to an intraday high of RMB 14,820/mt before inching down later the day due to the weakening LME zinc prices, and closing at RMB 14,765/mt, down RMB 75/mt or 0.51%. Trading volumes decreased by 6,522 lots, to 20,150 lots, and total positions decreased by 7,026 lots, to 83,438 lots.
#0 zinc prices were between RMB 14,670-14,720/mt, with spot discounts between RMB 80-110/mt against SHFE 1405 zinc contract prices. #1 zinc prices were between RMB 14,660-14,670/mt. SHFE 1405 zinc contract prices opened at RMB 14,790/mt on Friday, then inched down, pushing down spot prices, with spot discounts narrowing further. Traders were moving goods actively, while smelters reduced goods supply, with downstream buyers remaining cautious. Shuangyan branded #0 zinc prices were between RMB 14,700-14,720/mt, with RMB 14,670-14,690/mt for Qinxin, Yuguang and Baohui branded #0 zinc.
SHFE lead prices rallied to RMB 14,600/mt after starting at an intraday low of RMB 14,945/mt, and closed down RMB 35/mt at RMB 13,570/mt in Thursday’s night trading session. During the night session, trading volumes were 52 lots, while positions gained 26 lots to 8,710 lots. SHFE lead prices moved up to the range of RMB 13,560-13,580/mt after initially falling to RMB 13,520/mt, and finished down RMB 35/mt at RMB 13,570/mt on Friday. Trading volumes were 1,100 lots, and positions were off sharply 788 lots to 7,896 lots due to shorts liquidating positions.
In the Shanghai physical lead market, goods from Chihong Zn & Ge traded on Friday at RMB 13,650/mt, a premium of around RMB 90/mt over the most active SHFE lead contract, with limited trading volumes for high prices. Chengyuan warrants were offered at a premium of RMB 100/mt over SHFE 1404 lead contract prices. Traded prices were RMB 13,620/mt for Yubei branded lead supply, and RMB 13,600/mt for Shuangyan and Honglu resources. Lead smelters were inactive moving goods, leaving lead supply in a still tight condition. Downstream producers had low buying interest since the Crimean referendum scheduled on Sunday fueled wary sentiment in the market on Friday.
In Shanghai’s physical tin market, traded prices were reported between RMB 139,000-141,000/mt last Friday. Most deals were completed between RMB 139,500-140,000/mt, though. Goods available on the market consisted largely of first-tier brand tin. Yunxi brand tin was offered higher at RMB141,000/mt. Consumption was sluggish.
In Shanghai, SMM #1 nickel prices were between RMB 95,200-96,200/mt, with traded prices of RMB 95,100-96,100/mt. Some traders sold off Russian nickel whilst buying Jinchuan nickel, and downstream buyers purchased on an as-needed basis, with transactions briskly made among traders.