SMM Copper Market Daily Review (2014-3-18)

SHANGHAI, Mar. 19 (SMM) – The most active SHFE copper contract prices started higher at RMB 44,770/mt in Monday’s night session, boosted by LME copper prices finding technical support at USD 6,400/mt for a fourth consecutive trading day. The contract prices fell slightly to test support at RMB 44,420/mt after touching a high of RMB 44,830/mt, and finished up RMB 20/mt at RMB 44,580/mt. During the trading hours, trading volumes edged down a touch to 298,485 lots, while positions gained by 8,886 lots. SHFE copper prices handily surged on Tuesday above the RMB 45,000/mt mark, helped by a strong rally in LME copper prices, and later peaked at RMB 45,350/mt. During the afternoon trading session, the red metal came off below RMB 45,000/mt, and ended up RMB 340/mt or 0.76% at RMB 44,900/mt on Tuesday. Trading volumes shrunk by 38,728 lots, and positions increased by 914 lots. SHFE copper prices have found temporary support at the 5-day moving average, and are likely to trend higher in the near future.

Copper was quoted on Tuesday between a discount of RMB 60/mt and a premium of RMB 30/mt in the Shanghai physical market. Traded prices were RMB 44,820-45,280/mt for standard-quality copper and RMB 44,900-45,380/mt for high-quality copper. As SHFE copper prices rebounded, cargo holders offered spot copper between a discount of RMB 30/mt and a premium of RMB 30/mt, while some middlemen entered the market at suitable time, with trading activity turning brisk. SHFE copper prices later rallied by nearly RMB 600/mt, and spot copper was offered lower between a discount of RMB 60/mt and a premium of RMB 20/mt. SHFE current-month copper prices were regarded as too high above the RMB 45,350/mt mark, with few quotations in the market. Hydro-copper supply gradually flowed in the physical market, with increasing trading activity, but spot copper premium is not expected to last long. Spot copper continued to trade at a par as SHFE copper prices hovered at high levels. High-quality copper mostly was sold between RMB 45,050-45,200/mt, a discount of RMB 60/mt and a premium of RMB 30/mt over SHFE current-month copper contract. Cargo holders remained inclined to move goods on Tuesday.