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SMM Copper Market Daily Review (2014-4-23)
Apr 24,2014 08:47CST
price review forecast
Source:SMM
The most active SHFE copper contract price leveled out during Tuesday’s night session after starting at RMB 46,580/mt, helped by a rebound in LME copper prices.

SHANGHAI, Apr. 24 (SMM) – The most active SHFE copper contract price leveled out during Tuesday’s night session after starting at RMB 46,580/mt, helped by a rebound in LME copper prices. The contract prices encountered resistance subsequently at RMB 46,700/mt, and closed up RMB 150/mt at RMB 46,640/mt. Traded volumes rose slightly to around 110,000 lots, while positions gained 13,192 lots. On Wednesday, SHFE copper prices rallied to RMB 46,860/mt at some point, but later pulled back immediately after the release of HSBC’s China manufacturing PMI which was still soft. The red metal hovered around RMB 46,600/mt during the afternoon trading session, falling as low as RMB 46,470/mt, but rebounded at the tail of the trading to close up RMB 300/mt, or 0.65%, at RMB 46,790/mt. Traded volumes expanded 11,330 lots, while positions increased 11,416 lots. SHFE copper prices still are confronted with resistance at the RMB 47,000/mt mark, and are expected to be range-bound for the short term.

In the Shanghai physical market, copper was offered Wednesday at a premium of RMB 440-600/mt over the nearby SHFE contract. Traded prices were RMB 47,980-48,150/mt for standard-quality copper and RMB 48,040-48,280/mt for high-quality copper. As SHFE copper prices rallied before a pullback, cargo holders ramped up deliveries at high prices, and copper supply from long-term contracts continued to flow in the market. As a result, physical premiums fell with signs of panic selling in the market, but downstream producers still favored standard-quality copper, allowing narrower gap between standard-quality and high-quality copper. Standard-quality copper was quoted at a premium of RMB 440-520/mt over the nearby SHFE contract by the midday. Middlemen were disinclined to enter the market after physical premiums continued to narrow, with light trading volumes and supply exceeding demand. As SHFE copper prices traded in a narrow range during the afternoon session, some speculators bought spot copper and liquidated futures contracts, with high-quality copper brands gaining their favor. Decreasing copper supply later pushed up premiums to RMB 450-600/mt over the nearby SHFE contract, but traded prices fell slightly to a RMB 47,950-48,150/mt band.
 

SHFE copper prices
spot copper prices

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