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SMM Base Metals Market Daily Review (2014-4-3)
Apr 4,2014 09:46CST
price review forecast
The most active SHFE copper contract price followed LME copper prices down to RMB 46,500/mt after starting at RMB 47,040/mt.

SHANGHAI, Apr. 4 (SMM) –

The most active SHFE copper contract price followed LME copper prices down to RMB 46,500/mt after starting at RMB 47,040/mt, and ended down RMB 140/mt at RMB 46,570/mt during Wednesday’s night session. Traded volumes rose slightly to around 190,000 lots, while positions gained by 8,702 lots. On Thursday, SHFE copper prices fell to around the RMB 46,000/mt mark after losing support at RMB 46,500/mt, and hovered narrowly around RMB 46,200/mt during the afternoon trading session. The red metal rebounded at the tail of the trading to regain some losses and closed down RMB 380/mt, or 0.81%, at RMB 46,330/mt on Thursday. Traded volumes for the most active SHFE copper contract rose by 170,000 lots, and positions added by 16,494 lots. SHFE copper prices have sought support at the 10-day moving average, and aim to rise above the 30-day moving average in the near term.

In the Shanghai physical market, copper was offered Thursday at a premium of RMB 150-270/mt over the SHFE current-month copper contract. Traded prices were RMB 46,750-46,950/mt for standard-quality copper and RMB 46,830-47,050/mt for high-quality copper. As SHFE copper prices trended lower, cargo holders still managed to trade at the same premiums as Wednesday. SHFE copper prices later snapped their losing streak, with low-priced copper barely found in the market. This, combined with a more than RMB 150/mt gap between the SHFE 1404 copper contract and the SHFE 1405 copper contract, pushed spot premiums higher. Downstream producers purchased goods Thursday only on an as-needed basis. As SHFE copper prices hovered in narrow ranges during the afternoon trading hours, cargo holders continued to hold spot premiums firm at RMB 200-280/mt and traded goods at RMB 46,880-47,020/mt.

On Wednesday night, SHFE 1406 aluminum contract crept higher to RMB 13,175/mt after starting at RMB 13,130/mt, but immediately fell back to end the night session at RMB 13,090/mt. Trading volumes totaled 16,786 lots, and positions increased 3,324 lots to 127,032 lots. On Thursday, the most active contract dropped further to RMB 13,035/mt, but rebounded later in the day, finishing the daytime session RMB 90/mt higher at RMB 13,110/mt. Trading volumes totaled 26,142 lots, and positions tumbled 4,162 lots to 122,870 lots.

Spot aluminum largely traded at RMB 12,690-12,700/mt in Shanghai and Wuxi on Thursday morning, and RMB 12,700-12,710/mt in Hangzhou. Falling SHFE aluminum left cargo holders eager to sell, but buyers were little interested in buying. In the afternoon, the rally in SHFE aluminum drove some suppliers to refrain from selling in hopes of better prices while allowing others to raise offers to RMB 12,700/mt.

Soft economic data from European countries released overnight triggered expectations that the European Central Bank may ease its monetary policy. US jobs report from ADP and February factory orders also came in positive. SHFE lead prices followed LME lead prices up to a high of RMB 13,740/mt after starting at RMB 13,720/mt, but later fell to end down RMB 10/mt at RMB 13,685/mt during Wednesday’s night session. Traded volumes were 32 lots, and positions were off 6 lots to 7,042 lots. On Thursday, SHFE lead prices edged down to the RMB 13,700-13,720/mt trading range after touching RMB 13,740/mt briefly, and finished up RMB 5/mt at RMB 13,700/mt. Traded volumes were 476 lots, and positions were down 176 lots to 6,872 lots. SHFE lead prices now fare the worst among the base metals complex, pressured by all major moving averages. Despite negative technical indicators, any downside in prices will be limited due to strong copper, aluminum, and nickel prices.

In the Shanghai physical lead market, goods from Chihong Zn & Ge traded Thursday at RMB 13,670/mt, a discount of RMB 30-40/mt over the SHFE 1405 lead contract price. Humon and Shuangyan resources were sold at RMB 13,650-13,660/mt and RMB 13,640/mt, respectively. Chihong Zn & Ge and Humon moved goods in light volumes, while Nanfang and Chengyuan branded lead was little found in the market. Despite the obtaining of banking loans and restocking demand before the arrival of the Tomb Sweeping day, downstream purchases were restrained by weak SHFE lead prices. 

SHFE 1406 zinc contract prices opened high at RMB 14,875/mt on Wednesday evening, and then dropped, closing at RMB 14,820/mt, up RMB 15/mt or 0.1%. Trading volumes decreased by 4,560 lots to 5,084 lots, and total positions decreased by 108 lots to 73,714 lots. SHFE 1406 zinc contract prices opened at RMB 14,820/mt on Thursday, then moved between RMB 14,805-14,830/mt, and closing the day at RMB 14,845/mt, up RMB 40/mt or 0.27%. Trading volumes decreased by 6,592 lots, to 12,014 lots, and total positions decreased by 1,770 lots, to 72,052 lots.

#0 zinc prices were between RMB 14,690-14,710/mt, with spot discounts between RMB 100-130/mt against SHFE 1406 zinc contract prices. #1 zinc prices were around RMB 14,650/mt. SHFE 1406 zinc contract prices opened at RMB 14,825/mt on Thursday, and then leveled out. Traders lacked interest in transactions, and smelters were still unwilling to move goods, with some brands still in short supply. Despite cash flow tightness eased, downstream enterprises lacked buying interest, with transactions muted. Shuangyan branded #0 zinc prices were around RMB 14,710/mt, with RMB 14,700/mt for Yuguang branded #0 zinc, RMB 14,690/mt for Qinxin, Jiulong and Feilong branded #0 zinc. Imported Spanish and Belgian #0 zinc prices were around RMB 14,680/mt.

In Shanghai physical market, traded prices were reported between RMB 137,000-139,000/mt on Thursday, but most transactions were between RMB 137,000-137,500/mt. Despite rising LME tin prices, downstream producers were entrenched in a wait-and-see posture.

In Shanghai, SMM #1 nickel prices were between RMB 104,000-105,000/mt, with transactions muted. Jinchuan nickel prices were RMB 104,900-105,000/mt, RMB 900-1,000/mt higher than Russian nickel prices, with transactions for the latter light.




SHFE copper prices
SHFE aluminum prices
lead prices
zinc prices
tin prices
nickel prices

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