SMM Copper Market Daily Review (2014-3-25)

SHANGHAI, Mar. 26 (SMM) – The most active SHFE copper contract price started Monday’s night session at RMB 45,480/mt, and later encountered resistance at RMB 45,630/mt. The red metal later dipped to a low of RMB 45,230/mt, and closed up RMB 20/mt at RMB 45,270/mt. During the night session, trading volumes fell slightly to around 250,000 lots, while positions were barely changed. The most active SHFE copper contract prices fluctuated between RMB 45,150-45,350/mt on Tuesday, and then surged by nearly RMB 800/mt to RMB 46,350/mt. The contract prices hovered around RMB 45,800/mt during the afternoon trading session, and finished up RMB 640/mt, or 1.41%, at RMB 45,890/mt on Tuesday. Trading volumes gained by 51,082 lots, and positions shed by sharply 43,156 lots. SHFE copper prices have found stronger support at the 5-day moving average on Tuesday and are expected to bounce back in the near term.

Copper was offered on Monday at a premium of RMB 80-170/mt over SHFE current-month copper contract prices in the Shanghai market. Traded prices were RMB 45,550-46,100/mt for standard-quality copper and RMB 45,600-46,200/mt for high-quality copper. As SHFE copper prices traded in small swings during the morning trading session, cargo holders move goods steadily. Prices for standard-quality copper rose due to tight supply, and high-quality copper was sold at a higher premium, with downstream producers and middlemen trading briskly. After SHFE copper prices rose by RMB 200/mt, high-quality copper was quoted at a narrower premium of RMB 80-150/mt. SHFE current-month copper contract prices later followed LME copper prices up sharply by RMB 800/mt to touch a high of RMB 46,460/mt, leaving spot trading muted. Downstream producers and middlemen were cautious in buying goods at high prices. A rebound in SHFE copper prices, however, boosted market confidence in sustained spot premiums. Spot premiums of goods traded with invoices were around RMB 30/mt higher than those of goods traded without invoices on Tuesday. As SHFE copper prices moved narrowly during the afternoon trading session, spot copper was offered steadily at a premium of RMB 100-180/mt on Tuesday. Some middlemen continued to enter the market to buy goods, with spot copper prices barely changed.