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SMM Base Metals Market Daily Review (2014-4-18)
Apr 22,2014 10:05CST
price review forecast
The most active SHFE copper contract price dipped during Thursday's night session to RMB 46,450/mt, and finished up RMB 30/mt at RMB 46,600/mt.

SHANGHAI, Apr. 22 (SMM)--

The most active SHFE copper contract price dipped during Thursday's night session to RMB 46,450/mt, and finished up RMB 30/mt at RMB 46,600/mt. Traded volumes stood at around 90,000 lots, while positions gained 7,548 lots. SHFE copper prices fell Friday back to a low of RMB 46,240/mt, and closed down RMB 210/mt, or 0.45%, at RMB 47,360/mt. Traded volumes shed 58,440 lots, and positions gained 7,694 lots. SHFE copper prices have found support at the 20-day moving average.

In the Shanghai physical market, copper was offered Friday at a RMB 680-800/mt premium to the nearby SHFE contract. Traded prices were RMB 47,820-47,920/mt for standard-quality copper and RMB 47,880-47,980/mt for high-quality copper. With the absence of guidance from LME copper prices, SHFE copper prices consolidated narrowly on Friday. Some cargo holders were prevented from booking goods overseas, which reduced physical supply and in turn pushed up premiums further. Middlemen had limited buying interest, but downstream producers ramped up purchases, with trading activity picking up. Physical premiums are expected to remain elevated next Monday since trading will continue to be suspended on the London Metal Exchange then. As SHFE copper prices fell slightly during the afternoon trading session, physical copper was offered at a higher premium of RMB 750-830/mt, with traded prices between RMB 47,850-47,950. Some middlemen entered the market to purchase goods, but trading activity was mild. SHFE copper stocks decreased by 10,194 mt to 132,477/mt, and limited inflows promise a sustained high premium for the short term.
Last Thursday night, SHFE 1406 aluminum contract inched down to RMB 13,175/mt after starting at RMB 13,230/mt, and finished the night session at RMB 13,205/mt. Trading volumes totaled 4,800 lots, and positions contracted 214 lots to 117,826 lots. Last Friday, the most active contract slid to RMB 13,170/mt before rebounding above the 5-day moving average, closing at RMB 13,225/mt. Trading volumes totaled 8,700 lots, and positions fell 3,672 lots to 114,154 lots.

Spot aluminum largely traded at RMB 12,970-12,980/mt in Shanghai and RMB 12,980-12,990/mt in Wuxi and Hangzhou last Friday. SHFE 1405 aluminum contract inched down, deterring traders from entering the market. Downstream producers increased raw material purchases slightly ahead of the weekend. In the afternoon, offers were reported at RMB 12,980-12,990/mt, and a few transactions were concluded.

SHFE 1407 zinc contract prices opened at RMB 15,110/mt, and inched down due to falling LME zinc prices, and closing at RMB 15,075/mt, down RMB 15/mt or 0.1%. Trading volumes increased by 4,758 lots to 11,374 lots, and total positions increased by 2,432 lots to 61,550 lots.

With the lack of directions from the LME market, SHFE 1407 zinc contract prices dropped after opening as a large number of longs left the market, dipping to RMB 15,020/mt on Friday. SHFE 1407 zinc contract prices clawed back most losses, and climbed to RMB 15,065/mt, and closing at RMB 15,075/mt, down RMB 15/mt or 0.1%. Trading volumes decreased by 4,170 lots, to 18,126 lots, and total positions increased by 2,140 lots, to 63,690 lots.
#0 zinc prices were between RMB 15,000-15,020/mt, with spot discounts expanding to RMB 20-60/mt against SHFE 1407 zinc contract prices. #1 zinc prices were around RMB 14,980/mt. SHFE 1406 zinc contract prices opened at RMB 15,075/mt on Friday, and then fell to fluctuate around RMB 15,040/mt. Spot supply was tight since some smelters conducted maintenance and held back goods. SHFE zinc prices fell after opening, but continuously rising spot prices stimulated traders to sell goods. Nevertheless, they held back goods again due to tight supply. Spot prices edged up as SHFE zinc prices stabilized, with regular brand #0 zinc prices returning above RMB 15,000/mt. Falling zinc prices prompted some downstream buyers to replenish stocks, causing trading to improve. Shuangyan branded #0 zinc prices were between RMB 15,000-15,020/mt, with RMB 15,000/mt for Baohui, Qinxin, Yuguang, Jiulong and SMC branded #0 zinc.
The most active SHFE 1405 lead contract price started Thursday's night session at RMB 13,790/mt, and ended down RMB 5/mt at RMB 13,760/mt. Traded volumes totaled 108 lots, while positions gained 12 lots to 5,982 lots. SHFE lead prices outperformed other base metals prices to hover Friday between RMB 13,790-13,800/mt, and finished up RMB 35/mt at RMB 13,800/mt, meeting resistance at the 40-day moving average. Traded volumes expanded 384 lots to 858 lots, and positions lost 60 lots to 5,910 lots.

In the Shanghai physical lead market, goods from Chihong Zn & Ge, Nanfang, and Chengyuan were offered Friday at RMB 13,820/mt, but traded at RMB 13,800/mt, a RMB 10-30/mt premium to the SHFE 1405 contract. Humon and Shuangyan brands were sold at RMB 13,790/mt and RMB 13,770/mt, respectively. Tight supply in the Shanghai market gave cargo holders an incentive to hold prices firm. Downstream producers, however, mostly sat tight Friday despite restocking demand ahead of the weekend, leaving traded volumes comparatively light.
In Shanghai physical tin market, most transactions were between RMB 139,500-141,000/mt last Friday. Yunnan Chengfeng Non-ferrous Metals Co. hiked ex-works prices to RMB 141,500-142,000/mt, while Yunnan Tin Co. kept offers unchanged at RMB 142,000/mt. Downstream producers stayed out of the market against limited orders. 

In Shanghai, SMM #1 nickel prices were between RMB 119,300-120,200/mt. Many traders suspended operations last Friday due to the lack of directions from the LME market. Jinchuan nickel prices were between RMB 120,000-120,100/mt, and Russian nicekl prices were around RMB 119,300/mt, with transactions extremely muted.


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